The Catastrophe Fund pays claims above what private insurance companies must pay in the event a further need develops. To reduce the cost of private wind coverage for Florida homeowners, lawmakers expanded the “Cat Fund” this year so the state would pay the difference.
The Florida Board of Administration is meeting to discuss options to be sure that, in case of a hurricane, there will be funds to cover losses, and are considering a $5-BB loan for the Hurricane Catastrophe Fund, which currently has about $5-BB on hand from private insurers paid premiums and money borrowed last year still left over. Members of the Board include Governor Charlie Crist and the Attorney General and CFO. CFO Alex Sink liked the borrowing option and said that interest income might cover interest that would be paid. They are developing a proposal to allow their staff to negotiate to borrow funds.