WASHINGTON–Republican presumptive presidential candidate John McCain voiced opposition to a bill proposing a national risk pool for natural catastrophes, and a Florida Democratic congressman rebuked him for his comments.
The issue arose yesterday, when the Arizona senator, while traveling on his campaign bus in Florida, said while he sympathizes with homeowners battered by soaring insurance costs, he was not prepared to endorse a national risk pool as a way to bring those prices down.
Instead, Sen. McCain said, states threatened by the storms should form regional alliances to protect themselves.
He also called support for the bill by the presumptive Democrat presidential nominee, Illinois Sen. Barack Obama, “either misleading or misinformed.”
That brought an immediate response from Rep. Tim Mahoney, D-Fla., co-author of legislation establishing such a program, the “Homeowners Defense Act of 2007,” H.R. 3355.
Mr. Mahoney's bill would allow states to pool catastrophe risks and then transfer them to the private market through the sale of catastrophe bonds or purchase of reinsurance.
In his comments, Rep. Mahoney said Sen. McCain “appears to be misinformed about this issue that is so critical for Floridians,” and asked him to meet with the broad coalition that supports it.
He said the bill would make homeowners insurance affordable by expanding the private market for reinsurance.
According to Mr. Mahoney, the measure will also “significantly lower homeowners insurance premiums and ensure that those states that voluntarily participate will have the money to get families back in their homes helping our communities.”
The bill would also establish a National Homeowners Insurance Stabilization Program to provide low-interest federal loans to states impacted by severe natural disasters.
The bill passed the House in November 2007, 258-155, but has no support in the Senate.
An alternative, adding wind coverage to the National Flood Insurance Program, also passed the House last November as H.R. 3121. But efforts to add it to the Senate version of H.R. 3121 in May failed decisively, 73-19.
Congress is now seeking to reconcile the two versions of the bill reauthorizing and reforming the NFIP. Current authorization expires Sept. 30.
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