TALLAHASSEE — Florida’s state-created fund that backs up private insurers is in a “strong” position heading into this year’s hurricane season, which could rekindle debate over whether state officials should use the fund to help lower insurance rates.
The fund — known as the Florida Hurricane Catastrophe Fund — should have $10.16 billion available for the Atlantic hurricane season that starts June 1, according to estimates presented to an advisory council on Thursday. It has that much money available even though the fund has had to pay out billions in recent years due to devastating hurricanes such as Hurricane Ian.
The fund offers insurance companies reinsurance at prices generally lower than those in the private market. Wall Street firms and financial advisers, who twice a year calculate how much the fund needs and could borrow in the event of a catastrophic storm, have concluded its borrowing limit exceeds what it would need to cover losses this year.
The latest estimates show that the fund is expected to have nearly $7 billion in the bank this year that it could then use in tandem with bonds to cover losses. The fund already has access to $3.25 billion in proceeds, and the latest estimates project the fund would be able to borrow an additional $6.8 billion if needed.
