Who’s behind the opposition?

Brandes said influential Chamber members include representatives of the private-market reinsurance industry, which stand to lose money if insurers can buy cheaper reinsurance from the CAT Fund, and large insurance companies that can buy reinsurance from their own subsidiaries and wouldn’t benefit from the proposed reforms.

Johnson declined to identify Chamber members opposed to the reforms, noting only that some are insurance companies. She also pointed out that some insurance companies in Florida “rely on the CAT Fund more than others” and some “are more capitalized than others.”

Handerhan said warnings that the CAT Fund could go insolvent if the retention point is lowered amounted to a “scare tactic.”

“Any event that triggers that type of loss is going to be game-over for the entire insurance industry in Florida,” he said. “Everyone will be wiped out. You’ll see companies going broke, you’ll see special Legislative sessions to respond to the emergency.”

He pointed out that the sum of all claims paid by the CAT Fund since its 1993 creation is about $15 million, roughly the amount of the Fund’s current claims-paying ability. When the Fund was originally created, it had zero cash — only the ability to raise money by selling bonds backed by special assessments. Today, the Fund generates $1 billion a year by selling reinsurance and continuing to levy the pre-event Rapid Build Up Factor surcharge, which insurers pass along to their customers.

Sen. Ben Albritton, a Bartow Republican, suggested scheduling a workshop or task force to look at the issues. Wilson said that CAT Fund officials only learned about the proposal 24 hours before the hearing and called for a “deliberate” and “collaborative” process to help legislators understand how the proposals would affect the CAT Fund.