Two people that Crist did not mention writing to – U.S. Representatives Ginny Brown-Waite (Fl-05) and Vern Buchanan (Fl-13) – introduced the Homeowners' Insurance Protection Act of 2007 on the first day of the 110th Congress. The Brown-Waite Buchanan bill seeks to establish a federal reinsurance catastrophic fund (cat fund) as a federal backstop for future natural disasters.
The bill encourages states to create catastrophic funds by providing a federal backstop for those states that voluntarily create state funds. 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 bill, should a 1:200 year natural disaster event strike a state, the federal catastrophe fund would provide coverage up to a 1:500 year event.
The bill also 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.
The bill makes it clear that all cost savings achieved through the legislation must be passed along to the consumer, and not kept as corporate profits. Additionally, the legislation creates Catastrophic Capital Reserve Funds; essentially tax deferred savings accounts that may be used by private insurance companies to help offset the costs of 1:100 year events.
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