A lot of folks in the industry have been offering opinions on Florida’s decision to rely on its state-run Citizens Property Insurance Co. and its state-sponsored Florida Hurricane Catastrophe Fund in order to bring property insurance rate relief to homeowners in hurricane-exposed areas of the state.
Many have suggested that state lawmakers are subsidizing development in high risk areas of the state, increasing the exposure to future storms while transferring the cost of insuring those properties to homeowners in lower risk areas. In fact, those were among the points raised in a study by Milliman Inc. released this week that was commissioned by the Property Casualty Insurers Assn. of America.
Others, including Milliman and the PCI, say the state is engaging in a high stakes gamble, one that threatens to send Florida to the bond markets seeking tens of billions of dollars to pay claims should a one-in-25-year storm strike. Such a bond isssue would dwarf any previous single municipal bond offering, and could potentially wreck the state’s credit rating in addition to burdening taxpayers for years to come.
Okay, as if Florida lawmakers rolling the dice on a future hurricane isn’t enough, this morning I see this, an Associated Press report that the Florida Lottery says it won’t pay a $500,000 prize to the holder of a $20 scratch-off ticket because lottery officials say one of the numbers on the ticket is a misprint! According to the AP story, while the matching numbers on the card made it appear to be a winner, scanning its bar code indicated it wasn’t a winning ticket.
We got a release from Florida CFO Alex Sink the other day announcing the names of appointees to the Task Force on Citizens Property Insurance Claims Handling and Resolution, and I didn’t see anybody on the list identified as a state lottery official. Still, the situation gives one pause.
Everyone knows that even insurance companies that have been in the business for decades occasionally provide customers policy documents containing typos and misprints.