The current credit crunch and crisis, problems with issuing and insuring the payment of Bonds, and at least one of the questioned credit rating corporations used in the Insurance industry, have recently made appearances together in the Florida Capitol.
The current credit crunch has appeared together with the specter of a failure in the market for Florida Bonds. "In light of the troubled housing and credit markets, state leaders have expressed doubt that they'd be able to sell $27 billion in bonds needed to pay storm claims if a Katrina-sized hurricane hit a major population center in Florida." Julie Patel, "State Legislators Say Property Insurance Law Has Deep Flaws" (South Florida Sun-Sentinel.com, 10:24 PM EDT, Monday, March 24, 2008).
In addition, embattled credit rating company Fitch Ratings just issued a timely report. In its report, Fitch reportedly takes the position that Homeowner's Insurance Coverage would "'effectively collapse'" if there is a Hurricane in Florida in 2008. The Fitch report comes just as the Florida Legislature is debating whether to writedown and rollback, or extend, the emergency laws it passed in Special Session in January, 2007.
A majority in the Florida Senate reportedly is in favor of extending and expanding the 2007 Special Laws on Hurricane Insurance. For example, a majority of the Florida Senate reportedly supports extending a moratorium on Premium Rate Increases by Citizen's Property Insurance Company. The moratorium or "freeze" on Rate hikes is due to expire on January 1, 2009. Citizen's is owned and operated on behalf of Florida Taxpayers as a State agency offering circumscribed Homeowner's and other Property Insurance Coverages. That its offerings became suddenly more popular in 2006 and 2007 was taken then as a sign of a desperate Homeowner's and Property Insurance Market in Florida.
On the other hand, a present majority in the Florida House of Representatives reportedly opposes extending the moratorium on Citizen's Property Insurance Premium increases. Further, a majority in the Florida House is reported to support "scaling back the catastrophe fund" that the Florida Legislature rushed into place in its 2007 Special Session.
More to come in the struggle among and between Premium Rate Increases and the availability of credit, the performance and issuance of so-called Municipal Bonds such as the Florida Bonds in question in the Florida Capitol, and the very existence and availability of Homeowner's Insurance Coverage in Florida.
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