Under a proposal from Fort Lauderdale representative Ellyn Bogdanoff the state would take over all hurricane insurance while at the same time dismantling its property insurance and reinsurance funds.
Bogdanoff says that her bill would calm the roiled property insurance market in Florida and actually allow taxpayers to save money while boosting the private sector.
Under Bogdanoff's plan, the state would do away with Citizens Property Insurance, a taxpayer backed insurance company, and the Florida Hurricane Catastrophe Fund, which provides reinsurance to companies who sell property policies.
The state would then assume all hurricane risk and allow private insurers to sell policies for other property risks, like fire and vandalism. The private companies would administer the hurricane insurance, but the state would receive the premiums and be responsible for paying claims if a major hurricane struck.
State officials would then purchase reinsurance coverage to ensure it could cover the damage in the event of a hurricane more powerful than a 50 year storm.
'We don't have an insurance problem, we have a hurricane problem. And that's probably not going to go away,' she said.
Lawmakers have devoted new attention to property insurance in recent weeks after State Farm Florida announced it would pull out of the state and as state officials lobby the federal government for a letter of credit for the Hurricane Catastrophe Fund. That programme could come up billions of dollars short if a major hurricane hits.
With the current system, the state would have to raise about $35 billion under a worst case scenario, Bogdanoff claimed. Her plan would require the state to raise just $22 billion, and less in future years if the state continues to collect premiums without facing a major storm.