The Bermuda reinsurance industry has been criticised by a Florida state legislator who describes as “simply insane” plans for the state-run catastrophe fund to buy up to $1.5 billion in private reinsurance.

Representative Frank Artiles, a Miami Republican, said the Florida Hurricane Catastrophe Fund (FHCF) buying the private reinsurance would be like “throwing a lifeline” to Bermuda reinsurers.

The fund has sought approval from its trustees to place $1 billion to $1.5 billion of reinsurance limit for the 2014 hurricane season. The plan would require the approval of Governor Rick Scott and Florida cabinet members and the vote is expected to take place next month. A ‘yes’ vote would likely mean some extra business for Bermuda’s property catastrophe reinsurers.

In a letter to Gov Scott, Rep Artiles said the state fund is supposed to be a buffer against volatile price swings from offshore private reinsurers, not a customer to increase their business.

“In recent years, when demand was stronger than supply, Bermuda reinsurers had no reservations about jacking up rates on Floridians,” said Artiles, a public adjuster. “Sending them a lifeline now when we are finally seeing some signs of rate relief is simply insane.”

According to a report in The Palm Beach Post, Dennis MacKee, director of communications for the State Board of Administration, said: “The reinsurance idea is still being looked at. No decision has been made to move forward with it or not as yet.”

Jack Nicholson, the FHCF’s chief operating officer, said at an industry conference last month the idea probably would raise consumer rates less than one percent and could help lower the risk of assessments to state insurance customers if the coverage were needed.

The FHCF has claimed to be in the best financial shape since it was founded 21 years ago. Eight years without a major hurricane making landfall in the wind-prone state have allowed the fund to build up some $11 billion in surplus.

However, losses from a direct hurricane hit in a developed area could be several times that amount and could leave taxpayers liable to meet excess claims.

A report by catastrophe modellers AIR found that Florida’s coastal property is valued at just under $3 trillion. The Sunshine State accounts for almost 30 percent of the United States’ entire $10 trillion coastal exposure, AIR found.

Robert Hartwig of the Insurance Information Institute, told Reuters last year: “It’s very fortunate for Florida that is has been able to build up its reserves, but the fact of the matter is that Florida is living on borrowed time.”