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State News

Florida Hurricane Catastrophe Fund Performing Adequately, Its Advisor Says

Tropical Weather
Angie Wang/AP
/
AP
A damaged business is seen in the aftermath of Hurricane Sally, Thursday, Sept. 17, 2020, in Perdido Key, Fla. (AP Photo/Angie Wang)

Amid a lively hurricane season, the state trust fund that subsidizes reinsurance for property insurers in the private sector is performing adequately.

Financial services firm Raymond James serves as the Florida Hurricane Catastrophe Fund’s advisor. The company’s Kapil Bhatia gave an update Tuesday on the fund’s estimated claims-paying capacity for the next two years.

“The fund is at an excellent position to meet its statutory maximum potential obligation, even after hurricane Irma and Michael’s losses, for the 2021 season as well as the 2022 season,” Bhatia told the fund’s advisory board.

According to a report prepared by Bhatia’s firm: “The FHCF projects that its year-end fund balance for the 2020-2021 Contract Year is $11.4 billion and it has an estimated bonding capacity of $8.7 billion … which equals a total estimated claims-paying capacity of $20.1 billion, or $3.1 billion above its statutory limit of $17.0 billion.”

Florida Hurricane Catastrophe Fund was created by the Florida Legislature in 1993 following Category 5 Hurricane Andrew, which devastated South Florida.