In a case of the Feds following the states' lead, a comprehensive catastrophe insurance bill was introduced in Congress on November 17th. Based on Florida's version of a national insurance catastrophe fund, Republican Representatives Ginny Brown-Waite (R-FL) and Clay Shaw (F-FL) proposed HELP: the Consumer Hurricane and Earthquake Protection Fund, HR 4366. To access the full bill text, visit Thomas and search for bill HR 4366. Members interested in this issue should continue to monitor developments via CAI's Advocacy Center, under the "Federal Center" header.
The Brown-Waite Shaw legislation, covering a host of disasters beyond hurricanes and earthquakes, has been drafted to cut homeowner insurance costs and ensure insurance market liquidity by reinforcing the insurance market. It proposes providing reinsurance to primary insurance companies at lower rates than they can get on the private market. Private insurers would be responsible for losses based upon individual state or regional-determined amounts; state catastrophe funds then would pay additional losses up to their limits before qualifying for HELP. As introduced, the national fund would sell reinsurance to the state funds as another incentive for states to establish their own catastrophe funds. To view a copy of Representative Shaw's press release on this legislation, go to: shaw.house.gov/News/DocumentSingle.aspx?DocumentID=37093.
The timing of this federal introduction cannot be accidental—November 15th and 16th saw the National Catastrophe Insurance Summit convened in California. Staff from the National Association of Insurance Commissioners (NAIC), state insurance regulators from several insurance departments (including Florida, New York, Illinois, and California), and insurance company experts met to discuss and devise a national catastrophic insurance plan (see www.caionline.org/govt/news/Pages/Multi-StateInsuranceRegulatorsConveneCatastrophicInsuranceSummit.aspx for a summary of this meeting). The questions now on hand: will there be some type of comprehensive catastrophe insurance program established? Moreover, if it is, will it be done on a national level (through federal legislation), or on a state-by-state or regional basis?
Stay tuned to see how this issue shakes out. 11/05