The national credit crunch could threaten the viability of
Florida's hurricane insurance backup fund and that could lead to
more home foreclosures, the state's insurance commissioner told a
Senate committee Thursday.
The panel's chairman said one alternative would be to raise
premiums for homeowner and other property coverage.
The problem lies with the Florida Hurricane Catastrophe Fund,
commonly called the "cat fund." It is having a hard time lining
up financing, Insurance Commissioner Kevin McCarty told the Senate
Ways & Means Committee on Thursday.
Many insurance companies so heavily depend on the fund that they
might be downgraded to the point home mortgages, which require
borrowers to buy adequate property insurance, could go into
default, McCarty said.