Sunday, June 01, 2008

Cavalcade of Capitalists: Can Any Good Insurance Come from Florida?

On the one hand, Florida insurers--who are prohibited from using short-timeline equations for passing on higher recent hurricane claim costs to consumers--rely on their "reinsurers" to use short-timeline equations for passing on higher recent hurricane claims to them, and then they pass those costs on to consumers. On the other hand, what look like the "insurance entrepreneur" equivalent of predatory lenders or the sub-prime mortgagers are moving around the gulf coast pushing risky policies that they probably do not have the capital to support in the event of a disaster.

Disaster capitalism is alive and well and ready to skim a quick buck off any crisis mode. If coastal residents are not confronted with phantoms, then they are swimming with sharks.

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