| 1 | The Commerce Council recommends the following: |
| 2 |
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| 3 | Council/Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 | House Memorial |
| 6 | A memorial to the Congress of the United States urging |
| 7 | Congress to support a National Catastrophe Insurance |
| 8 | Program. |
| 9 |
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| 10 | WHEREAS, during the 2004 and 2005 hurricane seasons, the |
| 11 | State of Florida was devastated by eight hurricanes and four |
| 12 | tropical storms, causing approximately $35 billion in estimated |
| 13 | gross probable insurance losses, and |
| 14 | WHEREAS, the hurricanes from the 2004 and 2005 hurricane |
| 15 | seasons have produced high winds, coastal storm surges, |
| 16 | torrential rainfalls, and flooding resulting in significant |
| 17 | damage to Florida and the Gulf Coast states, which has resulted |
| 18 | in displacement of policyholders from their dwellings, loss of |
| 19 | personal belongings and contents, closing of businesses and |
| 20 | financial institutions, and temporary loss of employment and has |
| 21 | created numerous health and safety issues within our local |
| 22 | communities, and |
| 23 | WHEREAS, in 1992, Hurricane Andrew resulted in |
| 24 | approximately $20.8 billion in insured losses and was previously |
| 25 | the costliest catastrophe in the United States, but Hurricane |
| 26 | Katrina alone left the Gulf Coast states with an estimated loss |
| 27 | of approximately $35 billion, and |
| 28 | WHEREAS, natural disasters continually threaten communities |
| 29 | across the United States with extreme weather conditions that |
| 30 | pose an immediate danger to the lives, property, and security of |
| 31 | the residents of those communities, and |
| 32 | WHEREAS, the insurance industry, state officials, and |
| 33 | consumer groups have been striving to develop solutions to |
| 34 | insure mega-catastrophic risks, because hurricanes, earthquakes, |
| 35 | tornadoes, typhoons, floods, wildfires, ice storms, sinkholes, |
| 36 | and other natural catastrophes continue to affect policyholders |
| 37 | across the United States, and |
| 38 | WHEREAS, on November 16 and 17, 2005, insurance |
| 39 | commissioners from Florida, California, Illinois, and New York |
| 40 | convened a summit to devise a national catastrophe insurance |
| 41 | plan which would more effectively spread insurance risks and |
| 42 | help mitigate the tremendous financial damage survivors contend |
| 43 | with following such catastrophes, NOW, THEREFORE, |
| 44 |
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| 45 | Be It Resolved by the Legislature of the State of Florida: |
| 46 |
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| 47 | That the Congress of the United States is urged to support |
| 48 | a National Catastrophe Insurance Program. Policyholders require |
| 49 | a rational insurance mechanism for responding to the economic |
| 50 | losses resulting from catastrophic events. The risk of |
| 51 | catastrophes must be addressed through a public-private |
| 52 | partnership involving individuals, private industry, local and |
| 53 | state governments, and the Federal Government. A national |
| 54 | catastrophe insurance program is necessary to promote personal |
| 55 | responsibility among policyholders; support strong building |
| 56 | codes, development plans, and other mitigation tools; maximize |
| 57 | the risk-bearing capacity of the private markets; and provide |
| 58 | quantifiable risk management through the Federal Government. The |
| 59 | program should encompass: |
| 60 | (1) Providing consumers with a private market residential |
| 61 | insurance program that provides all-perils protection. |
| 62 | (2) Promoting personal responsibility through mitigation; |
| 63 | promoting the retrofitting of existing housing stock; and |
| 64 | providing individuals with the ability to manage their own |
| 65 | disaster savings accounts that, similar to health savings |
| 66 | accounts, accumulate on a tax-advantaged basis for the purpose |
| 67 | of paying for mitigation enhancements and catastrophic losses. |
| 68 | (3) Creating tax-deferred insurance company catastrophe |
| 69 | reserves to benefit policyholders. These tax-deferred reserves |
| 70 | would build up over time and only be eligible to be used to pay |
| 71 | for future catastrophic losses. |
| 72 | (4) Enhancing local and state government's role in |
| 73 | establishing and maintaining effective building codes, |
| 74 | mitigation education, and land use management; promoting state |
| 75 | emergency management, preparedness, and response; and creating |
| 76 | state or multistate regional catastrophic risk financing |
| 77 | mechanisms such as the Florida Hurricane Catastrophe Fund. |
| 78 | (5) Creating a national catastrophe financing mechanism |
| 79 | that would provide a quantifiable level of risk management and |
| 80 | financing for mega-catastrophes; maximizing the risk-bearing |
| 81 | capacity of the private markets; and allowing for aggregate risk |
| 82 | pooling of natural disasters funded through sound risk-based |
| 83 | premiums paid in correct proportion by all policyholders in the |
| 84 | United States. |
| 85 | BE IT FURTHER RESOLVED that copies of this memorial be |
| 86 | dispatched to the President of the United States, to the |
| 87 | President of the United States Senate, to the Speaker of the |
| 88 | United States House of Representatives, and to each member of |
| 89 | the Florida delegation to the United States Congress. |