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State delays bond sale for Hurricane Wilma claims

TALLAHASSEE — Fears of insurance fraud prompted state officials Wednesday to delay selling $710 million in bonds to pay new and reopened claims by homeowners dating to Hurricane Wilma in 2005.

Cash from the bond sale would result in higher premiums for most insured homeowners by about $18 a year.

Gov. Charlie Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum, who serve as trustees of the hurricane catastrophe fund, balked at issuing the bonds.

"We don't want good citizens to pay for bad behavior," Crist said.

Crist added he found it stunning to discover that the catastrophe fund does not review most claims in advance of reimbursing insurers for paying claims.

So many claims are submitted (2.8 million already filed from the 2004-2005 season), it would be impossible to review them all in advance, CAT fund chief operating officer Jack Nicholson said.

The agency samples claims and looks for trends.

Crist, Sink and McCollum said the delayed demand for claims from the stormy 2005 season underscores the need to shorten the time frame for filing claims from five years to three. The deadline for Wilma-related claims will take place this fall.

"Three years is plenty enough time to know if you have damage from a hurricane," Sink said.

Rep. Janet Long, D-St. Petersburg, and Sen. Mike Bennett, R-Bradenton, have filed bills for the 2010 legislative session to impose a three-year window on claims from a storm.

The Florida Insurance Council, an industry group, has endorsed the legislation and noted that after the most expensive hurricane in Florida history, Hurricane Andrew, pounded South Florida in 1992, 90 percent of all claims were received within six months.

Ash Williams, director of the state Board of Administration that manages the CAT fund, cited three main factors to explain the flood of claims: the struggling Florida economy, laws to speed up payment of claims to consumers and explosive growth in public adjusters.

Public adjusters use fliers, door hangers and ads to encourage homeowners to file claims and then receive up to 10 percent of payments.

Williams said the number of public adjusters has skyrocketed in recent years from fewer than 700 a few years ago to nearly 3,000.

Times staff writer Jeff Harrington contributed to this report. Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

State delays bond sale for Hurricane Wilma claims 02/24/10 [Last modified: Wednesday, February 24, 2010 9:56pm]
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