TALLAHASSEE, FL – The Heartland Institute today unveiled a plan to erase Florida’s $3 billion budget gap.
The plan is based on a simple observation: If land-falling hurricanes were eliminated, property and casualty insurance rates would fall far below those currently extended anywhere in the state market. Banning hurricanes from making landfall in the state would allow for an immediate phase-out of the Florida Citizens Property Insurance Corporation and the Hurricane Catastrophe Fund. The $4 billion currently held in the Catastrophe Fund could be used to close the state’s $3 billion budget gap plus send a check for $200 to every family of four in the state.
“Brilliant, out-of-the-box thinking,” is how Lirpa Sloof, president and CEO of Sloof Mutual Insurance Corporation in Tallahassee, Florida, reacted to the proposal. “I have dozens of underwriters, actuaries, and producers working for me,” Sloof said. “This solution hadn’t occurred to a single one of them.”
“Some Florida politicians have long held themselves out as being all-wise, all-knowing, and all-powerful,” explained Heartland Vice President Eli Lehrer. “Banning hurricanes from entering the state easily falls within the realm of powers certain elected officials wish they had.”
Heartland President Joseph Bast said the plan’s theoretical foundations conform with sound economics. “Milton Friedman taught us that an economic theory is stronger in proportion to its assumptions being counter-factual. By assuming no hurricanes, it is very easy to predict the level of savings to the state’s taxpayers.”
Bast also reminded potential critics of the plan that “it is more realistic to assume no more hurricanes than to assume regulators are better able to set insurance rates and manage risk than private insurers and their customers.”
According to Christian Cámara, Heartland’s Florida director, laws banning hurricanes from Florida would do more good than most of the state’s existing insurance-related laws. “Florida’s insurance regulators have suppressed insurance rates all over the state, failed to promote property mitigation, let the Cat Fund grow out of control, and subsidized the development of coastal wetlands. Florida has already violated nearly every rule of sound policy out there. I see no harm in violating one more.”
Lehrer can be reached for additional comment at 202-615-0586 or [email protected]. Cámara can be reached at 305-608-4300 or [email protected].
The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Washington, DC, Tallahassee, Florida, and Austin, Texas. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site at http://www.heartland.org or call 312/377-4000.