Florida Hurricane Catastrophe Fund Issues May 2011 Estimated Claims Paying Capacity Report
May 31, 2011
Pursuant to Florida law, the State Board of Administration (“SBA”) has announced the Florida Hurricane Catastrophe Fund (“FHCF” or “Fund”) estimated borrowing capacity, estimated claims-paying capacity and projected balance of the Fund as of December 31, 2011. The Fund’s projected post-event borrowing capacity estimate is $11.3 billion.
The FHCF’s estimated borrowing capacity and projected available year-end cash balance, together with other liquid resources, provides it with an initial season total estimated claims-paying capacity of $18.551 billion.
According to the SBA, given the current state of the financial markets, the range of potential borrowing capacity estimates is dependent on many factors, such as: the size of the event, the markets accessed, the time necessary to access such markets and the interest rates utilized.
The FHCF’s projected year-end asset balance on December 31, 2011 is estimated to be $7.25 billion, which represents the amount of assets available to pay claims, not including any bond proceeds, incurred from Covered Events that may occur during the June 1, 2011 through May 31, 2012 FHCF Contract Year.
In its announcement, the SBA stated its recognition that its good faith estimate is being made while highly volatile global financial market conditions exist; therefore, changing market conditions could dramatically impact the FHCF’s actual claims-paying capacity. Current conditions may not be the same if and when the SBA determines that it is necessary to seek the issuance of revenue bonds.
Greater detail can be obtained in the FHCF’s “May 2011 Estimated Claims Paying Capacity Report,” which can be accessed by clicking here.
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