CAT advisers: Only panic if it's the big one
Buzz is sitting through a riveting Catastrophe Fund Advisory Board meeting, where a packed room of insurers, government staffers and lobbyists are listening to a briefing of what the Florida Hurricane Catastrophe fund can and can't do.
Long story short: The state hurricane catastrophe fund has access to more money than it's ever had before. But it's also on the hook for more than it ever has been before. So if there's a major, big-time hurricane between now and the end of the year, the state fund couldn't reimburse insurers right away for claims, because it can't bond large amounts. But if the weather holds up and there's no hurricanes, we do this dance again next year.
That's Buzz's translation of Raymond James catastrophe fund adviser John Forney.
Here's his explanation: "The CAT fund does have the most liquid resources available to it than it’s ever had. That said, because of the expanded size of the CAT fund and the dire state of the credit market, the CAT fund couldn’t do what it needed to do to meet its contractual obligation."