Fast Focus
	Florida’s approach to catastrophes is to use unrated or poorly rated carriers, raising questions about how much protection there really is.
	Every person and business with a Florida auto or property policy will be on the hook—unless the feds come to the rescue.

Committing Insurance Without a License

WHAT? ME WORRY? Florida's hurricane insurance reforms mean every Florida insurance consumer may be buried under surcharges piled atop surcharges--all to create cheap rates today. Some see a federal bailout in the offing.

By  Cheryl Arvidson

[Page 5 of 8]

Is he saying he would be more comfortable if insurers would cover their bets with private reinsurance?

“Yeah,” Nicholson replies. “Nobody is going to be real excited about reinsurance that doesn’t pay. It would question your ongoing ability as a state entity to offer reinsurance. I’m going to do everything in my capacity to get the debt sold, but the big negative is just the unknown risk. How big will the loss be? What if it is a $100 billion storm? What if there is some lock up in the markets for a $10 billion shortfall? If I were an insurance company, I might want to sue the cat fund or sue the state.”

So with hurricane season just starting and running through November, does he sleep at night?

“I try to but not real well,” Nicholson says. “I didn’t vote for this stuff. I just tell them what the effects are.”

Arvidson is a contributing writer. Cheryl.Arvidson@LeadersEdgeMagazine.com

New, thinly capitalized, unrated insurers flood Florida market while heavy hitters pull back.

A number of new, startup insurers have moved into Florida, many with state government incentives, to fill gaps left by the major personal lines carriers that have pulled back or stopped writing property business altogether, but there is no proof those insurers are financially stable.

Florida Gov. Charlie Crist and Insurance Commissioner Kevin McCarty hail the arrival of these new companies as giving Florida consumers more options and taking pressure off Citizens. The startup companies receive low-interest loans from the state if they are willing to use a percentage of their capital to assume policies that were issued by Citizens Property Insurance Corp.

The Florida Senate this spring approved a bill adding $250 million to the program.