Representative Klein Provides National Catastrophe Fund Update in Tallahassee

On Thursday, March 20, 2008, this Office attended a Press Conference held by United States Representative Ron Klein to provide an update regarding the National Catastrophe Insurance Bill.
 
Congressman Klein’s legislation, the Homeowners’ Defense Act of 2007, passed the U.S. House of Representatives on November 8, 2007 and is currently pending in the U.S. Senate.

Congressman Klein stated that this Bill has national relevance inasmuch as many states recently have experienced catastrophic events and the corresponding issues relating to homeowner’s insurance. Congressman Klein explained that the purpose of the National Catastrophe Insurance Bill is to provide for a viable, self-sustaining system whereby states are able to pool and blend their catastrophe risk, thereby fostering a competitive market and providing affordability and accessibility to homeowners.

Congressman Klein emphasized that the National Catastrophe Bill is a proactive approach that allows state-sponsored insurance funds to voluntarily pool their catastrophe risk, and then transfer that risk to the private markets through catastrophe bonds and reinsurance contracts.  The Congressman’s bill also provides for a ‘backstop’ mechanism whereby the federal government would be empowered to make loans to a state facing financial shortfalls after a natural catastrophe. 

Congressman Klein also stressed that Senator Chris Dodd (D-CT), Chairman of the Senate Banking Committee, has expressed strong support for the National Catastrophe Bill and he and his staff have further evaluated and studied the bill.  Congressman Klein said that he is open to the possibility that the bill will “further evolve” in the Senate; his commitment is to ensure the bill will create affordability for consumers, stabilize the homeowner’s insurance market and allow states to effectively plan for a catastrophe.

Congressman Klein expects that the bill will likely reach the Committee level in the U.S. Senate within the next two months.

Please feel free to contact this office should you have any questions regarding the above matter. 

 

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