Lloyd's insurers could be hit by the State of Florida's decision to nearly double the Florida Hurricane Catastr-ophe Fund, the former chairman and chief executive of AIG warned this week.
Speaking at Lloyd's this week, Maurice 'Hank' Greenberg, now chief executive of US insurer CV Starr, strongly criticised the move which will see Florida increase the fund which provides back-up cover for property insurers wanting to reduce their risks from major catastrophes to $32bn.
He said: "Florida has nationalised its catastrophe business without compensation for those within that business, which I think is wrong.
"No one in the industry is capable of responding to a nuclear attack as there is simply not enough capital.
"That is where government back-up is required. But not when states take out business where an industry wants to charge for it."
It is feared that reinsurers participating in that state could be impacted by the decision to increase the level of catastrophe cover.
With calls from Florida officials for other states to join it in creating an independent insurance fund, Greenberg expressed concern that the practice could spread to states such as Mississippi, Louisiana and California.
Meanwhile, Lloyd's has added its weight behind fresh calls from Greenberg for a US-wide insurance regulator to be created.
Chairman Lord Levene and former deputy chairman Bronek Masojada joined Greenberg in calling for a US federal charter for insurance regulation.
Levene said: "As a victim of the existing system and the iniquities that Lloyd's has had to suffer over collateral, the sooner a new system comes in the better."
