WASHINGTON--Members of the House Financial Services Subcommittee on Oversight and Investigations will hold a hearing Monday in Florida to examine the impact of the homeowners' insurance "crisis" in areas prone to natural catastrophes.

Rep. Mel Watt, D-N.C., the chairman of the subcommittee, said he was looking forward to "hearing from Florida residents, industry representatives and elected officials about how the insurance industry has responded to natural disasters and about how the response can be improved."

Among those scheduled to testify is Florida Insurance Commissioner Kevin McCarty, who will ask lawmakers to support the Homeowners Defense Act introduced by Reps. Ron Klein, D-Fla., and Tim Mahoney, D-Fla.

This bill would establish a national catastrophe fund to back state funds, allow states to offer catastrophe bonds, and provide loans for mitigation programs that strengthen homes and areas against storms.

In his testimony, Mr. McCarty will point out that the U.S. is the only industrialized nation without a national catastrophe insurance system, and that the legislation would allow for states to address the problem of natural catastrophes before they even occur.

"Without it, the federal government and the affected states are forced into a reactive mode when a natural disaster strikes," he said in advance testimony submitted to the subcommittee. "We are forced to provide assistance without the luxury of time to plan and establish methods for an equitable distribution of assistance."

The House has already passed the legislation (H.R. 3355) that provides federal supports for catastrophe funds, and it currently awaits action by the Senate. "While the states must continue to address the insurance crisis on the local level, we will continue to work with Congress and the president until this bill is signed into law," said Rep. Klein.

Rep. Mahoney noted that the catastrophe fund measure has drawn opposition and a veto threat from the Bush administration, but he argued that hearings like the one taking place Monday could provide the support needed to get the bill signed into law.

"I believe that the testimony from the experts and homeowners will clearly show that the private markets have failed and it is the responsibility of Congress to step in and preserve the dream of home ownership for 65 percent of homeowners in this nation who are coping with skyrocketing premiums," he said.

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House Panel To Visit Fla. For Insurance Market Probe

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