The legislature expanded the cat fund under the promise that companies would purchase less expensive reinsurance; the theoretical savings would be passed on to homeowners in the form of lower rates. Unfortunately, the cat fund cannot cover a large event – the article projects the fund to cover about 1/6th of the exposure by the end of the year. The rating agencies are requiring companies to purchase more reinsurance in the private market to preserve their capital. Failure to do so will likely result in a rating downgrade for many carriers effectively putting them out of business.
The rate increases necessary to generate actuarially justified rates are being rejected because the Governor promised lower premiums. Meanwhile, the taxpayers were unkowingly given more risk through the deficits of the Cat fund and the expansion of Citizens. The Governor has a plan though – he responds to the crisis he has made worse by chastising the industry for being greedy.
Bingo! Let’s see, the CAT fund doesn’t have enough money to pay for a large event, and is dependent upon a volatile financial market to raise funds – an inherently unreliable source. And the OIR is criticizing insurers for going out and buying more reinsurance?
As you said, they don’t get it, and never will. What surprises me is how the “actuaries” (I use that term guardedly) who work for the OIR can actually sign off on or support the decisions of the Commissioner.
None of this has been run by the OIR or their actuaries. This was all done by the Legislature and Governor Charlie. Alex Sink,the CFO, has already said this does not make financial sense.She recommnded to the Governor and the Legislature to repeal the changes they made in the up coming special session.
Of cousre Charlie will have none of that. His public ratings may fall. He is a “sound bite and “photo-op” Governor. Whatever makes his public ratings better he is all for it. Doesn’t matter how it effects the state. Same thing has happened with property taxes and is about to happen with Auto Insurance.
Boy this is a very bad idea. The state is going to mortgage another $7b? Oh well it’s just tax payers money. As long as everyone is happy and we can sing kum-bye-ya, everything will be rosy.
We think there is an insurance crisis now, wait until a hurricane or two pass through Florida and cause damage. The assessible funds that policyholders are paying for now will pale in comparison to what they will be in order for the state to pay back all the bond debt.
What a terrible idea for the state to be in the insurance business!
Let’s see. A hurricane comes barrelling up the Gulf heading towards Miami. And Crist gets on his pulpit and says “Stop, the financial markets need to stablize so I can sell some bonds”
This is hilarious, as long as the wind doesn’t blow!!!
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The legislature expanded the cat fund under the promise that companies would purchase less expensive reinsurance; the theoretical savings would be passed on to homeowners in the form of lower rates. Unfortunately, the cat fund cannot cover a large event – the article projects the fund to cover about 1/6th of the exposure by the end of the year. The rating agencies are requiring companies to purchase more reinsurance in the private market to preserve their capital. Failure to do so will likely result in a rating downgrade for many carriers effectively putting them out of business.
The rate increases necessary to generate actuarially justified rates are being rejected because the Governor promised lower premiums. Meanwhile, the taxpayers were unkowingly given more risk through the deficits of the Cat fund and the expansion of Citizens. The Governor has a plan though – he responds to the crisis he has made worse by chastising the industry for being greedy.
Any new companies interested in entering Florida?
Let’s hear it for Pat!!
However you’re much to rational and logical. They don’t get it in Tally and never will.
Bingo! Let’s see, the CAT fund doesn’t have enough money to pay for a large event, and is dependent upon a volatile financial market to raise funds – an inherently unreliable source. And the OIR is criticizing insurers for going out and buying more reinsurance?
As you said, they don’t get it, and never will. What surprises me is how the “actuaries” (I use that term guardedly) who work for the OIR can actually sign off on or support the decisions of the Commissioner.
When was the last time you saw Crist who thinks he is CHRIST talking about insurance. He is hiding in the safest place during a hurricane “the closet”
Which closet?? Who said a closet!!!
None of this has been run by the OIR or their actuaries. This was all done by the Legislature and Governor Charlie. Alex Sink,the CFO, has already said this does not make financial sense.She recommnded to the Governor and the Legislature to repeal the changes they made in the up coming special session.
Of cousre Charlie will have none of that. His public ratings may fall. He is a “sound bite and “photo-op” Governor. Whatever makes his public ratings better he is all for it. Doesn’t matter how it effects the state. Same thing has happened with property taxes and is about to happen with Auto Insurance.
Boy this is a very bad idea. The state is going to mortgage another $7b? Oh well it’s just tax payers money. As long as everyone is happy and we can sing kum-bye-ya, everything will be rosy.
We think there is an insurance crisis now, wait until a hurricane or two pass through Florida and cause damage. The assessible funds that policyholders are paying for now will pale in comparison to what they will be in order for the state to pay back all the bond debt.
What a terrible idea for the state to be in the insurance business!
Let’s see. A hurricane comes barrelling up the Gulf heading towards Miami. And Crist gets on his pulpit and says “Stop, the financial markets need to stablize so I can sell some bonds”
This is hilarious, as long as the wind doesn’t blow!!!