Florida Officials call for multi-state insurance catastrophe fund.
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TALLAHASSEE, Fla. – Feb. 14, 2007 – Frustrated by inaction in Washington, Florida officials this week are asking other states to join them in setting up an insurance catastrophe fund.If established, a multi-state fund would bail out regions hit by cataclysmic disasters such as hurricanes, earthquakes, flooding and even terrorism.But unlike a national fund - which Congress has balked at creating - it wouldn’t rely on the financial backing of the federal government. Only interested states would participate.“We hear so much about the hurricanes in Florida, but we know there’s potential for a $400 billion loss in California due to an earthquake, and a $250 billion massacre if an earthquake strikes along the New Madrid fault (in the Midwest),” Florida Insurance Commissioner Kevin McCarty said Tuesday.McCarty and Florida’s chief financial officer, Alex Sink, head to Atlanta this week to host a meeting on multi-state catastrophe funds during a National Association of Insurance Commissioners’ conference. Sink said she was in favor of creating a regional fund that would help coastal states.“Hurricanes will not wait for the federal government to get a national catastrophe fund up and running,” said Sink, a Democrat. “It’s up to the coastal states to work together to ensure citizens have access to affordable hurricane insurance.”Aides to McCarty say the effort to start up multi-state funds was not a sign they were giving up on the idea of a national catastrophe fund. They say both are desirable.“If another state gets hit with a Katrina-like hurricane, there’s a limit to what the (insurance) industry can pay, a limit to what any state can handle, and (federal) taxpayers are going to pay the rest,” said Bob Lotane, a spokesman for McCarty’s office. “We believe pre-funding for a storm is going to be cheaper for everyone.”The lobbying effort comes as Florida Gov. Charlie Crist and legislative leaders begin pushing for a federal response to the catastrophe risk. Crist, a Republican, plans to lobby his peers on a national catastrophe fund during the National Governors Association meeting in Washington this month, while the speaker of the state’s House of Representatives, Marco Rubio, and state Senate President Ken Pruitt, both also Republicans, are organizing a federal/state summit with the catastrophe fund issue at the top of the agenda.State Sen. Steve Geller is urging Florida officials to pressure presidential candidates seeking early support in the state to commit to backing a national catastrophe fund. Geller is skeptical that states can agree on details to put multi-state catastrophe funds into action.“I don’t object to what (McCarty) is trying,” Geller said. “ It’s noble but unattainable. I just think there’s a little desperation in that we can’t get this (national catastrophe fund), so let’s get that (multi-state compact) instead.”
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TALLAHASSEE, Fla. – Feb. 14, 2007 – Frustrated by inaction in Washington, Florida officials this week are asking other states to join them in setting up an insurance catastrophe fund.If established, a multi-state fund would bail out regions hit by cataclysmic disasters such as hurricanes, earthquakes, flooding and even terrorism.But unlike a national fund - which Congress has balked at creating - it wouldn’t rely on the financial backing of the federal government. Only interested states would participate.“We hear so much about the hurricanes in Florida, but we know there’s potential for a $400 billion loss in California due to an earthquake, and a $250 billion massacre if an earthquake strikes along the New Madrid fault (in the Midwest),” Florida Insurance Commissioner Kevin McCarty said Tuesday.McCarty and Florida’s chief financial officer, Alex Sink, head to Atlanta this week to host a meeting on multi-state catastrophe funds during a National Association of Insurance Commissioners’ conference. Sink said she was in favor of creating a regional fund that would help coastal states.“Hurricanes will not wait for the federal government to get a national catastrophe fund up and running,” said Sink, a Democrat. “It’s up to the coastal states to work together to ensure citizens have access to affordable hurricane insurance.”Aides to McCarty say the effort to start up multi-state funds was not a sign they were giving up on the idea of a national catastrophe fund. They say both are desirable.“If another state gets hit with a Katrina-like hurricane, there’s a limit to what the (insurance) industry can pay, a limit to what any state can handle, and (federal) taxpayers are going to pay the rest,” said Bob Lotane, a spokesman for McCarty’s office. “We believe pre-funding for a storm is going to be cheaper for everyone.”The lobbying effort comes as Florida Gov. Charlie Crist and legislative leaders begin pushing for a federal response to the catastrophe risk. Crist, a Republican, plans to lobby his peers on a national catastrophe fund during the National Governors Association meeting in Washington this month, while the speaker of the state’s House of Representatives, Marco Rubio, and state Senate President Ken Pruitt, both also Republicans, are organizing a federal/state summit with the catastrophe fund issue at the top of the agenda.State Sen. Steve Geller is urging Florida officials to pressure presidential candidates seeking early support in the state to commit to backing a national catastrophe fund. Geller is skeptical that states can agree on details to put multi-state catastrophe funds into action.“I don’t object to what (McCarty) is trying,” Geller said. “ It’s noble but unattainable. I just think there’s a little desperation in that we can’t get this (national catastrophe fund), so let’s get that (multi-state compact) instead.”
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