Bill Seeks U.S. Natural Disaster Reinsurance
By Steven Brostoff, Washington Editor
NU Online New Service, April 3, 3:36 p.m. EST, Washington?The federal government would sell excess-of-loss reinsurance contracts to cover losses from natural disasters under legislation recently introduced in the House of Representatives.
The legislation, H.R. 4025, which was introduced by Rep. Dave Weldon, R-Fla., would have the Treasury Department auction the reinsurance contracts to private insurers and reinsurers, as well as state-run catastrophe pools.
The coverage would take effect following an earthquake, windstorm or other event of a magnitude that occurs only once in 100 years.
The legislation is very similar to a bill that was considered in the last two Congresses numbered H.R. 21.
The new bill is supported primarily by the Alexandria, Va.-based Independent Insurance Agents of America.
Maria Berthoud, senior vice president with IIAA, said the legislation would make insurance more available and affordable for homeowners.
"This will result in better access to homeowners coverage for millions of homeowners in coastal areas and earthquake susceptible communities," she said.
The legislation would provide coverage only for residential property and contents of apartments.
Because H.R. 4025 was introduced late in the 107th Congress, it likely has little, if any, chance for enactment.
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