WASHINGTON–Sen. Hillary Rodham Clinton, D-N.Y., joined with Sen. Bill Nelson, D-Fla., today in introducing legislation sponsors said is designed to help states deal better with natural catastrophes.
The legislation, the "Homeowners Defense Act of 2007," was introduced in the Senate as companion legislation, for a House measure introduced by two South Florida Democratic legislators, Rep. Ron Klein and Tim Mahoney. The House bill is scheduled for a Thursday debate..
Under the proposed Clinton-Nelson legislation, states would be allowed to pool their catastrophic risk together and then transfer it to the private market through the use of catastrophe bonds or the purchase of reinsurance.
Additionally, the bill would establish a National Homeowners Insurance Stabilization Program to provide low interest federal loans to states impacted by severe natural disasters.
The timing of the legislation is apparently influenced by the fact that Florida is now scheduled to be one of the first big states to hold a primary election, having moved up the date earlier this year.
Florida Republican Gov. Charlie Crist signed legislation in May advancing it to Jan. 29, leapfrogging other states in a move that political analysts said could "dramatically alter the Republican and Democratic presidential nominating campaigns."
The decision moved the Florida primary from March and leaves it behind only the Iowa and Nevada caucuses and the New Hampshire and South Carolina primaries.
As a result of Florida's move, South Carolina changed its primary from Jan. 29 to Jan. 19 to stay ahead of Florida.
In supporting Gov. Crist in his effort to push the primary, which generated criticism and threats from both the Republican and Democratic national committees, Florida House Speaker Marco Rubio said the effort to move up Florida's presidential primary was made to make the state more influential in the outcome and could put pressure on candidates to address issues of concern to Florida residents, such as catastrophe insurance.
"You don't have to answer those questions now in Iowa and New Hampshire, but you'll have to answer that in Florida. And now California is looking to move up their primary, and you'll have to answer it there as well," Speaker Rubio said.
In introducing the bill, Sen. Clinton, presidential primary entrant, and Sen. Nelson said that with the increased risk of floods, hurricanes and other natural disasters throughout the nation, the catastrophe insurance market has become volatile in many regions.
They said insurers have been pulling out of markets, not writing new policies or charging prohibitively high rates. "The result is that many American homeowners are increasingly caught in the Catch 22 of skyrocketing homeowners insurance premiums or little or no insurance coverage in the event of a disaster," they said.
"The current insurance market isn't responding fast enough to the new and heightened risks that many homeowners face," Sen. Clinton said. "We need a fresh and innovative approach to the current insurance problem that will help homeowners get access to effective and affordable disaster insurance."
In her statement, she said she "applauded" Rep. Klein and Rep. Mahoney for "their vision and leadership in championing this legislation in the House, and I am proud to introduce the Senate companion bill with Sen. Nelson, which deserves the Senate's consideration."
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