Ginny and Admiral Loy

Washington, D.C., Mar 7 - Speaking at the ProtectingAmerica.org media rollout earlier today, U.S. House Member Ginny Brown-Waite (FL-05) discussed the need for federal catastrophic insurance reform.  Rep. Brown-Waite also highlighted the legislation she and Rep. Clay Shaw (FL-22) introduced, the Homeowner’s Insurance Protection Act of 2005, a comprehensive catastrophic insurance bill that reduces homeowners insurance costs to American families and ensures liquidity in the insurance market.  The Brown-Waite Shaw bill will establish a federal reinsurance catastrophic fund (cat fund) as a federal backstop for future natural disasters.

"Natural catastrophes are national problems that need national solutions," said Rep. Brown-Waite.  "This isn't about earthquakes on the West Coast or hurricanes on the East Coast.  It's about natural catastrophes that can strike virtually anywhere in America.  Implementing a national catastrophic insurance fund will help local communities recover quickly and efficiently from the next natural disaster."

“Hurricanes Katrina and Wilma showed the nation what can happen when Mother Nature wreaks havoc on American homeowners,” said Rep. Brown-Waite.  “More than a thousand Gulf Coast residents lost their lives in the storm, and tens of thousands were left homeless.  The cost of rebuilding is great.  While Congress has met their immediate needs, it is clear that our national response to natural disasters is broken, and must be fixed.”

“Hurricanes, earthquakes, tornadoes and other natural disasters pose a threat to every corner of America,” continued Rep. Brown-Waite.  “Today, all taxpayers are paying for the recovery efforts in the Gulf.  The Brown-Waite Shaw bill creates a federal catastrophic reinsurance fund, which state cat funds would contribute to, so that the federal taxpayers would no longer be forced to foot the bill for natural disasters.”

Congressman Clay Shaw (R-Fort Lauderdale), Chairman of the Florida Congressional Delegation and the ranking Republican on the House Ways and Means Committee, said, “The hurricanes that devastated Florida last year did an estimated $22 billion in insured damages and we are now looking at close to $10 billion more from Hurricane Wilma.  Across the country we have witnessed the devastating effects of hurricanes, tornados, wildfires, snowstorms, and earthquakes to name a few.  We have also learned that no state is safe from an unexpected natural disaster.  Families and businesses are suffering from disaster fatigue, and this bill is designed to stabilize and reinforce the insurance market.  With a stable insurance market, families and local communities will be able rebuild faster—getting their homes and lives back on track.” Shaw said.

The Brown-Waite Shaw bill encourages states to create catastrophic funds by providing a federal backstop for those who do so.  The federal fund, to be named the Consumer Hurricane and Earthquake Protection Fund, or HELP Fund, will be housed in the Department of the Treasury and will provide lower-cost reinsurance to state cat funds, thus reducing the costs of homeowners' insurance to those around the country.  Under the Brown-Waite Shaw bill, should a 1:50 year natural disaster event strike a state, the federal catastrophe fund would provide coverage up to a 1:500 year event. 

“While all Americans have seen the devastation of the hurricanes that hit Florida, Mississippi, Alabama and Louisiana the last two years, the insurance market must be prepared for the possibility of even bigger disasters in the future,” continued Rep. Brown-Waite.  “If the San Francisco earthquake of 1906 were to hit today, the estimated costs to insurance companies would run more than $400 billion.  We need to have statewide cat funds, with a federal backstop, to help ensure the stability and viability of the insurance market for homeowners.”