TALLAHASSEE, Fla. (AP) - Florida's insurance commissioner says
the national credit crunch could lead to more home foreclosures.
That's because the Florida Hurricane Catastrophe Fund, which provides backup coverage for insurance companies, is having a hard time lining up financing, Commissioner Kevin McCarty told the Senate Ways & Means Committee on Thursday.
If the fund runs out of money, it sells bonds to cover remaining claims.
It's unlikely the fund could sell enough bonds if a major hurricane should strike because the bond market is so tight, McCarty said.
The state is exploring other options including a line of credit from the federal government.
Committee Chairman JD Alexander, R-Lake Wales, said one alternative is to raise premiums.
(Copyright 2009 by The Associated Press. All Rights Reserved.)