SBA possibly buys a pricey back-up plan
The State Board of Administration held a last-minute meeting on Wednesday morning where they decided they needed a back-up plan for the Florida Hurricane Catastrophe Fund.
The state would pay $220 million for a guarantee that if hurricanes hit and the catastrophe fund has been tapped to the tune of roughly $25 billion, that the state will be guaranteed access to another $4 billion to pay claims.
Both Attorney General Bill McCollum and CFO Alex Sink agreed that they didn't like this option at all but they agreed it needed to be done.
By law, the SBA had to pass a motion to increase premiums on insurers for CAT fund reinsurance to make this work. Sink and McCollum voted for it and Gov. Charlie Crist voted against it. What's unclear is whether or not the motion took unanimous consent, so it's unclear at this point whether or not the motion passed.
Crist voted against it, because the motion would increase rates on consumers, because insurers can pass that on. An analysis suggested it would raise rates roughly 2 percent.