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Catastrophe Fund official briefs committee on reserves, $17 billion cap and transparency limits
Summary
Gina Wilson, COO of the Florida Hurricane Catastrophe Fund, told the Insurance and Banking Subcommittee the fund had roughly $6.72 billion in projected year‑end cash (to be revised to $8.7 billion), about $3.25 billion in pre‑event bonds and nearly $10 billion in liquid resources; members asked about reserve methodology, proof‑of‑loss submissions and public transparency.
Gina Wilson, chief operating officer of the Florida Hurricane Catastrophe Fund, briefed the Insurance and Banking Subcommittee on the Fund's mission, coverage mechanics and current liquidity ahead of hurricane season.
Wilson said the Cat Fund is a statutory state trust fund created after Hurricane Andrew to provide a predictable source of reimbursement to residential property insurers. She described how insurers report exposures annually (no later than Sept. 1) and select a coverage level — 45%, 75% or 90% — that determines the Cat Fund's co‑pay structure. The fund's statutory maximum obligation is $17 billion, but she said the actual payable amount is the lesser of $17 billion or available cash plus purchased reinsurance and bonding capacity.
On liquidity, Wilson said the May projection showed a $6.72 billion projected year‑end fund balance, with a planned update to $8.7 billion after adjustments to reserves for prior storms (Ian and Milton). She said the fund holds about $3.25 billion in pre‑event revenue bonds that provide near‑term liquidity and that total liquid resources including those proceeds are roughly $9.97 billion under the May update.
Wilson explained premium calculation and oversight: independent actuaries develop the formula for an actuarially indicated premium (using hurricane models accepted by the Florida Commission on Hurricane Loss Projection Methodology), the formula is presented in March and approved unanimously by the trustees, and premiums are collected in installments with a true‑up billing in December.
Members asked about transparency and the Cat Fund's handling of company proof‑of‑loss submissions. Rep. Miller asked whether the public can inspect company claim submissions; Wilson said the Cat Fund does not post itemized claim submissions on its website and that insurance companies may assert trade‑secret protections for certain data. She described an exam process that the Fund uses to validate claimed losses and noted a commutation and multi‑year review process that settles event obligations over time.
On debt and assessments, Wilson walked members through the role of pre‑event and post‑event revenue bonds and explained that post‑event bonds are repaid through emergency assessments applied to a broad base of property and casualty premiums if issued.
Wilson said the Cat Fund has been actively reimbursing insurers for a series of recent hurricanes and that actuaries continually update incurred‑but‑not‑reported (IBNR) reserves; she invited members to follow up and offered continued technical briefings to committee members.
