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House Insurance Committee Probing if Citizens and Cat Fund Could Deliver |
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03/14/2008 |
FOR IMMEDIATE RELEASE Contact: Sam Miller (850) 386-6668 x223
Date: March 13, 2008 Gary Landry (850) 386-6668 x 226
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Citizens Property Insurance, Cat Fund's ability to pay claims this season to be subject of Friday’s House Insurance Committee Hearing
(TALLAHASSEE--) This week, the Florida Senate Banking & Insurance Committee was presented with sobering news that the Florida Hurricane Catastrophe Fund and the state’s largest homeowner’s insurer, Citizens Property Insurance Corporation, may have extreme difficulty paying claims from hurricanes timely, if completely at all, because of chaos in the New York financial markets. The House Insurance Committee has scheduled a special meeting for Friday, March 14 to begin its investigation of these state programs.
House Insurance Committee Chairman Don Brown, R-DeFuniak Springs, called the special Friday hearing upon reviewing testimony from the Senate Banking & Insurance Committee on Tuesday when the financial advisor for the Cat Fund and Citizens expressed serious concerns that the necessary funds could be timely raised by the Cat Fund, Citizens and private insurers following a major hurricane this year - because of the subprime lending crisis and a downturn in the national economy.
Added to the mix are a series of recommendations sent today to Senate President Ken Pruitt from the Senate Select Committee on Property Insurance Accountability that ignore the serious financial warnings raised before the Banking & Insurance Committee. The recommendations also fly counter to so far successful efforts by the state to attract new insurers to Florida to help control the growth of Citizens Property Insurance Corporation.
The Florida Insurance Council, the state’s largest insurance industry trade association, is preparing a White Paper on the growing concerns on whether the financial strategy developed to finance claims payments following a major hurricane can deliver in face of the worsening national economy. We will circulate it early next week. In the meantime, we remind you that the ability of the Cat Fund, Citizens and private insurers to meet all of their obligations following a major hurricane will be the focus of the House Insurance Committee hearing Friday, from 9 a.m. to 3 p.m. in Morris Hall, House Office Building. We encourage the media to monitor this meeting.
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The Florida Insurance Council is Florida's largest not-for-profit trade association representing 64 insurers groups - consisting of 200 companies - which write over $25 billion a year in premium volume and provide all lines of coverage.
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