The insurance crisis is not a Florida problem, it is a national problem that demands national solutions, Tom Gallagher, Florida CFO, said after applauding the Florida Legislature for calling on Congress to create a national catastrophe insurance plan.
The call for federal action, embodied in two legislative memorials — SM 1596, sponsored by Sen. Rudy Garcia and HM 541, sponsored by Rep. Dennis Ross — urges Congress to establish a fund that would help pay for losses resulting from natural disasters that exceed a state’s financial ability to recover. Covered events would include hurricanes, earthquakes, typhoons, volcanic eruptions, blizzards and ice storms.
In addition to calling for the creation of a federal risk-financing fund, the memorial promotes the use of disaster mitigation tools and the ability to manage tax-free disaster savings accounts. It also calls for strong building codes and land use management techniques, as well as well-coordinated state emergency management procedures. To increase availability of homeowners’ insurance coverage, the memorial urges allowing insurance companies to accumulate tax-deferred catastrophic reserves that would be used to pay policyholder claims.
“Like many of our Gulf Coast neighbors, many Floridians are struggling with higher insurance premiums or unable to find property insurance coverage in the private market for the upcoming hurricane season,” Gallagher said. “A national catastrophe plan is a long-term solution for improving our insurance market and reviving Florida’s catastrophe fund.
“We have been through eight hurricanes and suffered $30 billion in property losses but we are not alone in enduring severe losses,” he said. “With 115 major disaster declarations in more than 30 different states over the past two years, we, as a nation, need to plan for the cost of future catastrophes.”
Gallagher first called for the creation of a national catastrophe fund in 1993 following Hurricane Andrew.
HM 541 sponsored by Rep. Dennis Ross, is headed for the governor’s desk for signature.
Source: Department of Financial Services
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