TALLAHASSEE -- Heartland Institute staffers today praised proposals from Florida Hurricane Catastrophe Fund Chief Operating Officer Dr. Jack Nicholson that would put the giant taxpayer-backed reinsurer on sounder financial footing.
Nicholson’s proposals, put forward in public speeches and widely circulated draft legislation, the full text of which is available at www.outofthestormnews.com, includes provisions that would reduce the size of the government-run reinsurer’s “mandatory” layer, requires insurers participating in the fund to pay more, reduces special taxes the fund might impose on Floridians, and ends the fund’s never-funded TICL (temporary increase in coverage) layer.
Many of the proposals echo those made in a James Madison Institute report, written by Eli Lehrer, vice president of Washington, DC operations for Heartland, titled “Solutions to Restore Florida’s Property Insurance Marketplace to Protect Taxpayers and the Insured.” Although several Cat Fund reform proposals were floated during the previous legislative session, none received a floor vote.
Don Brown, a Heartland Institute senior fellow and former Florida legislator, says Nicholson’s proposal is necessary for Florida’s future. “For some time we have known that the Florida Hurricane Catastrophe Fund might not be able to borrow enough money to fully fund its mandatory coverage limit after a major storm. The uncertainty is now greater than ever given the status of the world financial markets.
“The proposal recently advanced to restructure the Catastrophe Fund to more accurately reflect its ability to fund post-loss obligations is not only timely but, in my opinion, not optional,” Brown continued. “We must thank Dr. Nicholson for his leadership and adopt his proposal as soon as possible.”
Heartland’s Florida director, Christian Cámara, agreed. “As currently structured, the Cat Fund poses an enormous risk to Florida taxpayers and the state’s economic future. This plan would be a major step in the right direction that would not only help insulate taxpayers from years of devastating post-hurricane taxes, but also promote the transfer of billions of dollars’ worth of hurricane risk outside our borders.
“The less hurricane risk taxpayers bear, the less likely it is that taxpayers will have to bail out the state after a storm,” Cámara said.
The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Illinois; Washington, DC; Austin, Texas; Tallahassee, Florida; and Columbus, Ohio. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.