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Statement from Tom Gallagher Regarding: Hurricane Savings Accounts

2/15/2005

CONTACT:
Tami Torres or Bob Lotane
(850) 413-2842
                                                    
WASHINGTON, D.C. - "Today, I met with several members of Florida's congressional delegation to promote legislation in Congress creating Hurricane Savings Accounts.  They were very receptive to providing Floridians options for preparing for the financial impact of a major storm.

"Hurricane Savings Accounts, which could also be named Catastrophe Savings Accounts for more universal usage, would encourage responsibility by saving for future adverse financial impacts associated with hurricanes or other natural disasters.

"Structured in the same manner as Health Savings Accounts and IRAs, a tax-free savings account could be opened to cover current and future hurricane-related expenses. The money deposited, as well as the interest earned, would be tax-deferred.  Unused balances would roll over from year-to-year.

"The ceiling on the accounts could be twice the amount of the individual's deductible, and the money could only be withdrawn to cover qualified hurricane expenses tax-free. Qualified expenses would include: deductibles, uninsured losses such as docks, flood damage, and structural upgrades for future storms.

"More importantly, as balances accumulate tax-free, consumers would have the option to purchase higher deductible policies which would result in lower annual premiums. The savings accounts would also encourage homeowners to make structural improvements to their homes to mitigate damage from a catastrophic event."