Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Insurer wants $14-million refund from state catastrophe fund

TALLAHASSEE — A property insurance company wants a refund from the state's hurricane catastrophe fund, saying the state charged for backstop insurance it didn't have the reserves to provide.

Although Tower Hill Insurance Group never needed the state's help to pay claims because no storms hit Florida, the company says the state overcharged for the amount of backup insurance it was really offering.

In October, state catastrophe fund officials revealed that the state would have been in deep financial trouble had major hurricanes hit this year. The state Cat Fund sold insurers $28-billion worth of back-stop insurance coverage, but officials said they had access only to enough money to pay half that amount.

Tower Hill's claim highlights the ongoing financial struggle that state officials face with the nation's weak economy. Although the state's catastrophe fund does hold some cash, covering losses from a major storm would require borrowing money on the bond market. And with a global credit crisis, even governments cannot borrow large amounts of money.

Two years ago, the Legislature and governor increased the state's burden to pay for hurricanes to keep premiums down. Insurers buy the state's cheap back-stop insurance, rather than shopping on the global market, and pass on the savings to home­owners.

Tower Hill has filed an appeal to the state catastrophe fund, asking for about half its money back, or $14-million of the $30-million in premiums it paid into the catastrophe fund.

"We're happy to pay for coverage that we receive, but in this case, the coverage wasn't there," said Tower Hill lobbyist Tim Meenan of Blank & Meenan in Tallahassee. Meenan acknowledged that had the world markets not collapsed, Tower Hill wouldn't have challenged the catastrophe fund.

The catastrophe fund has $9.2-billion in cash and borrowing capacity, and could have reimbursed insurers for some hurricane damage this year.

Also, state law gives the Cat Fund an out. If the catastrophe fund exhausts all available resources and doesn't have the ability to borrow money, it doesn't have to reimburse insurers that must pay claims.

Tower Hill insures about 155,000 policies statewide and accounts for about 5 percent of the private market in Florida, in terms of exposure, according to state insurance records. The Florida Property and Casualty Association, an insurance company group, filed a "petition for intervention," so its member insurers can benefit if state officials agree to give Tower Hill some its money back, said Mike Colodny, attorney for the group, which represents a few dozen Florida property insurers.

"We have to have real reinsurance that's going to deliver, because our luck is going to run out," said Sam Miller, spokesman for the Florida Insurance Council.

Jennifer Liberto can be reached at or (850) 224-7263.

Insurer wants $14-million refund from state catastrophe fund 12/11/08 [Last modified: Sunday, December 14, 2008 1:44pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Feeling mental fatigue after Hurricane Irma and other disasters? It's real.


    TAMPA — Blackness. Eyes closed or open, the same.

    A Tampa Bay Times reporter in a sensory deprivation tank used for floating therapy at Sacred Floats & Gems Co. located at 6719 N Nebraska Avenue, in Tampa, Fla., on Tuesday, September 19, 2017. Floating therapy relaxes people because they experience a sense of zero gravity when they are inside the tank, which contains 150 gallons of water and 1000 pounds of medical grade Epsom salt. ALESSANDRA DA PRA  |   Times
  2. Trump vows more sanctions on North Korea


    President Donald Trump vowed Thursday to impose more sanctions on North Korea as he prepared to meet with his counterparts from Japan and South Korea to seek a common strategy in confronting the isolated nuclear-armed state.

    U.S. President Donald Trump addresses the 72nd session of the United Nations General Assembly, at U.N. headquarters on Sept. 19, 2017. North Korean Foreign Minister Ri Yong Ho on Wednesday, Sept. 20, 2017 in New York described as "the sound of a dog barking" Trump's threat to destroy his country. [Associated Press]
  3. Tampa chamber of commerce votes against tax increase on business property


    TAMPA — The Greater Tampa Chamber of Commerce on Thursday voted against supporting a city of Tampa plan to raise taxes on commercial properties in the city for 2018. The property tax, included in the city's proposed $974 million budget, would boost taxes from $5.73 to $6.33 for every $1,000 in property value.

    The Greater Tampa Chamber of Commerce voted against supporting a city tax hike on commercial property. Pictured is Bob Rohrlack, CEO of the chamber. | [Times file photo]
  4. How should St. Pete make up for dumping all that sewage? How about a street sweeper?


    Every crisis has a silver lining.

    In the case of St. Petersburg’s sewage crisis, which spawned state and federal investigations and delivered a state consent decree ordering the city to fix a dilapidated sewer system, the upside is figuring out how to satisfy the $810,000 civil penalty levied by the Florida …

    City Council chairwoman Darden Rice said it was important to chose carefully because residents will be paying attention.
  5. A boy and a girl stare at the camera from their house after Hurrciane Maria hit the eastern region of the island, in Humacao, Puerto Rico, Tuesday, September 20, 2017. The strongest hurricane to hit Puerto Rico in more than 80 years destroyed hundreds of homes, knocked out power across the entire island and turned some streets into raging rivers in an onslaught that could plunge the U.S. territory deeper into financial crisis. [Associated Prss]