Proposals for a national cat fund
, which go back to at least the 1990s, traditionally involve creating a federal facility that provides reinsurance or loan guarantees to state catastrophe funds, which in turn provide reinsurance to private property insurers.
Kuegler and Mark Kaplan, CEO of startup incubator and co-working space, Alpha Loft, will run the Blue Cat Fund
and future funds.
"The money is there and it's in our pocket," Jack Nicholson, CEO of the Cat Fund
, told the Florida Times-Union.
The deal will allow the Florida Cat Fund
to reach its state-mandated ceiling of $7 billion to cover all storm claims in a single season.
Third Point CEO John Berger said, "While our existing cat fund
has delivered very attractive returns to investors since its inception in January 2012, we are mindful of the increasingly difficult conditions in the catastrophe reinsurance market in the near term and the increasing value of a broad underwriting platform.
Blending the Florida Hurricane Cat Fund
and Traditional Reinsurance
Both Citizens and the cat fund
's rates were frozen in 2006, which resulted in market turmoil in Florida until the state legislature unfroze Citizens' rates in 2009 with a reform package.
This tax issue has hung like a shroud over the entire CAT fund
debate for years.
Further down the coast in Florida, an under funded cat fund
is the "800pound gorilla" lurking behind all of the state's insurance issues, including State Farm's recent announcement that it's pulling out of the Florida property market, said Jeff Grady, president and CEO of the Florida Assn.
The notion of a federal nat cat fund
has long been debated--especially after the 2005 hurricane season, when Hurricanes Katrina, Rita, Wilma and Dennis caused over $56 billion in privately insured losses, $16 billion in National Flood Insurance Program (NFIP) claims and another $44 billion in uninsured losses.
Awards lie these deplete the CAT fund
and increase the amount all physicians in the state--regardless of specialty--must pay into it annually.