thefloridacurrent.com
By Gray Rohrer
April 5, 2012
Lawmakers who backed legislation to shrink the size and coverage of the Florida Hurricane Catastrophe Fund, or Cat Fund, lamented the bills’ failure Thursday, and vowed to fight for similar changes next year.
Sen. JD Alexander, R-Lake Wales, and Rep. Bill Hager, R-Boca Raton, sponsored bills (SB 1372 and HB 833) that would have reduced the Cat Fund’s coverage from $17 billion to $12 billion over five years and increased co-pays for insurers. In the statement, Alexander said the measure is needed to protect Floridians by covering a potential $3.2 billion shortfall if a one-in-100 year hurricane (a storm with a 1 percent chance of happening each year) were to hit the state.
“It’s extremely disappointing that good legislation which is necessary, cheap and honest was not seriously considered this session. While there were many important issues the full Legislature had to consider this year, as leaders of a hurricane-prone state this legislation should have been at the top of everyone’s list,” Hager said.
But opponents of the measure said that insurance companies would undoubtedly pass the cost of more expensive, private market reinsurance on to consumers, boosting premiums at a delicate time for homeowners struggling with underwater mortgages and foreclosure risks.
The bill cleared one Senate committee before it stalled in that chamber, and never came up for a vote in any House committee. Alexander tried to tack on a watered-down version of the bill to another insurance bill (HB 1127), but it was stripped on the floor of the Senate.
Alexander is term-limited, but Hager is a first-term House member. He says he will continue to push for Cat Fund changes next year.
“The reform included in SB 1372 and HB 833 was necessary and inexpensive compared to the risk and the alternatives. While we unfortunately did not make any progress this session, I pledge to continue the fight next year and put Florida on a needed path to stability,” Hager stated.
But Sen. Mike Fasano, R-New Port Richey, who led the effort to strike Alexander’s Cat Fund amendment from HB 1127, said the Legislature is not likely to pass bills that increase homeowner’s insurance premiums.
“There’s very little appetite both in the House and Senate for that,” Fasano said. “That bill would absolutely do that (increase rates), no ifs, ands or buts.”
Hager and Alexander counter that insurance companies will need to fill the gap of the potential shortfall by purchasing reinsurance in the private market anyway, meaning rates would go up in any case. But if Hager wants to get his bill through next year he could have another obstacle in his path. Fasano, term-limited in the Senate, has filed to run for a western Pasco County House district that is encompassed by his current Senate district.
