Photo above right: Senator Garcia, CFO Gallagher, Rep. Dick Kravitz, Rep. Ralph Arza and Rep. Dennis Ross call for the creation of a federal risk-financing fund.
|CFO Gallagher and Senator Rudy Garcia support legislation in Congress to create a national catastrophe insurance plan.|
GALLAGHER, HOUSE AND SENATE INSURANCE CHAIRS TELL CONGRESS: PASS NATIONAL CATASTROPHE PLAN
GALLAGHER SAYS NATIONAL PLAN WOULD STRENGTHEN FLORIDA’S INSURANCE MARKET AND IMPROVE AVAILABILITY OF COVERAGE
Tom Gallagher, Florida’s chief financial officer, joined Sen. Rudy Garcia and Rep. Dennis Ross to renew calls on Congress to support legislation to create a national catastrophe insurance plan. Garcia and Ross are sponsoring a legislative memorial which outlines the need for action by Congress to establish the plan. The call for such a program represents one of numerous reforms Gallagher has proposed to stabilize Florida’s property insurance market.
“Just this past week we have seen tornadoes in the Midwest, wildfires in Texas and the plains, and levees and dam breaks caused by heavy rains in California and Hawaii,” said Gallagher. “With 115 major disaster declarations in more than 30 different states over the past two years, we - as a nation - need to share the cost of preparedness for catastrophes.”
“Floridians are bearing the burden of paying higher insurance premiums, and too often they are not able to find insurance coverage at all,” said Garcia, chairman of the Senate Banking and Insurance Committee. “A national catastrophe plan is a long-term solution for improving our insurance market and would back up our state’s catastrophe fund.”
“Floridians have been through eight hurricanes and over $30 billion in losses over two years, and we have seen other states suffer severe losses as well,” said Ross, chairman of the House Insurance Committee. “Experts predict that it is a question of when, not if, one of the state insurance markets eventually fails. I don’t want Florida to be one of those states.”
The memorials presented today, SM 1596 and HM 541, both urge Congress to support a bill introduced by Florida representatives Ginny Browne-Waite and Clay Shaw, Jr., which calls for the creation of a fund that would help pay for losses resulting from natural disasters that exceed a state’s financial ability to recover. Events that would be covered include hurricanes, earthquakes, typhoons, volcanic eruptions, blizzards and ice storms. The national fund would be modeled after the Florida Catastrophic Hurricane Fund proposed by Gallagher in the wake of Hurricane Andrew in 1993.
In addition to calling for the creation of a federal risk-financing fund, the memorial promotes personal responsibility by encouraging the use of disaster mitigation tools and the ability to manage tax-free disaster savings accounts. These accounts would be allowed under federal legislation recently introduced by Florida Rep. Tom Feeney.
The memorial also encourages strong building codes and land use management techniques, in addition to improved state emergency management procedures.
To increase the amount of homeowners’ insurance coverage that is available, the memorial calls for allowing insurance companies to accumulate tax-deferred catastrophic reserves that would be used to pay policyholder claims. This would generate an estimated $15 billion worth of additional catastrophic reserves.
At a meeting of the Florida Cabinet today, Gallagher also approved a resolution appealing to Congress to create a national catastrophe plan for property owners.
Gallagher has also proposed Citizens Property Insurance Corporation only insure homes with values under $1 million and easing the financial burden of Citizens’ assessments on Florida homeowners. He also wants to help Floridians hurricane-proof their homes.
HM 541 is scheduled to be heard in the House Insurance Committee.
To view the poster, visit http://www.MyFloridaCFO.com/PressOffice/pdfs/NAtlCAtFund.pdf.