Florida is planning to borrow as much as $3.8 billion to infuse a state fund that reimburses property insurers for losses when homes are damaged or destroyed by hurricanes, Bloomberg News reported. The Florida State Board of Administration Finance Corporation expects to sell at least $1.5 billion of municipal bonds to raise money for the Florida Hurricane Catastrophe Fund, according to a securities filing dated Jan. 19. It marks the state’s latest effort to ensure that it can backstop its increasingly fragile insurance industry, which has been grappling with a surge of claims and lawsuits in recent years. In June, the Florida Insurance Guaranty Association, which handles the claims of insolvent insurers, sold debt for the first time in three decades to help support insurance claims. The state agency faced higher costs after Hurricane Ian in 2022 and a deluge of lawsuits forced property insurers to close. The latest bond sale wasn’t prompted by a specific hurricane. Proceeds will replenish funds from debt issued in 2020 that will mature in 2025, and give the fund “additional capital at an established interest rate and the ability to access funds quickly in the event of a significant storm event,” said Gina Wilson, chief operating officer of the Florida Hurricane Catastrophe Fund, in an emailed statement.
