Posted On: February 8, 2008, 12:47 pm CST

Posted By: Pat Beranger

The 24% savings promised by Governor Crist was based on the spin of industry critic Bob Hunter who told the Governor and legislature what they wanted to hear. The industry told anyone that would listen that the savings would not be realized.

The savings were from the increase in the Florida Hurricane Cat Fund - supposedly cheaper reinsurance. The Cat Fund cannot meet the exposure they've assumed as they are carrying Citizen's load. Their first bond offering of $5B resulted in a downgrade by Moodys and S&P. Still, their plan was to sell $28B, the largest bond offering in history to meet their obligations following a storm.

AM Best and companies realize the FHCF will not be able to meet obligations following a major storm; therefore, companies still had to purchase reinsurance elsewhere. Thus, the illusory savings promised by Hunter and Criss were never realized.

The Governor can keep spinning and name calling but there's no changing the facts. Thankfully no storm blew through last year to expose the shell game being played.