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Senate Memorial

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A memorial to the Congress of the United States, urging

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Congress to support a National Catastrophe Insurance

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Program.

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     WHEREAS, during the 2004 and 2005 hurricane seasons, the

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State of Florida was devastated by eight hurricanes and four

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tropical storms, causing approximately $35 billion in estimated

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gross probable insurance losses, and

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     WHEREAS, the hurricanes from the 2004 and 2005 hurricane

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seasons produced high winds, coastal storm surges, torrential

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rainfalls, and flooding resulting in significant damage to

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Florida and the Gulf Coast states, which resulted in displacement

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of policyholders from their dwellings, loss of personal

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belongings and contents, closing of businesses and financial

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institutions, and temporary loss of employment and created

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numerous health and safety issues within our local communities,

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and

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     WHEREAS, in 1992, Hurricane Andrew resulted in approximately

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$20.8 billion in insured losses and was previously the costliest

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catastrophe in the United States, but Hurricane Katrina alone

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left the Gulf Coast states with an estimated loss of

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approximately $35 billion, and

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     WHEREAS, natural disasters continually threaten communities

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across the United States with extreme weather conditions that

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pose an immediate danger to the lives, property, and security of

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the residents of those communities, and

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     WHEREAS, the insurance industry, state officials, and

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consumer groups have been striving to develop solutions to insure

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mega-catastrophic risks, because hurricanes, earthquakes,

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tornadoes, typhoons, floods, wildfires, ice storms, and other

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natural catastrophes continue to affect policyholders across the

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United States, and

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     WHEREAS, on November 16 and 17, 2005, insurance

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commissioners from Florida, California, Illinois, and New York

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convened a summit to devise a national catastrophe insurance plan

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that would more effectively spread insurance risks and help

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mitigate the tremendous financial damage survivors contend with

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following such catastrophes, NOW, THEREFORE,

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Be It Resolved by the Legislature of the State of Florida:

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     That the Congress of the United States is urged to support a

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National Catastrophe Insurance Program. Policyholders require a

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rational insurance mechanism for responding to the economic

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losses resulting from catastrophic events. The risk of

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catastrophes must be addressed through a public-private

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partnership involving individuals, private industry, local and

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state governments, and the Federal Government. A national

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catastrophe insurance program is necessary to promote personal

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responsibility among policyholders; support strong building

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codes, development plans, and other mitigation tools; maximize

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the risk-bearing capacity of the private markets; and provide

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quantifiable risk management through the Federal Government. The

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program should encompass:

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     (1)  Providing consumers with a private market residential

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insurance program that provides all-perils protection.

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     (2)  Promoting personal responsibility through mitigation;

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promoting the retrofitting of existing housing stock; and

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providing individuals with the ability to manage their own

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disaster savings accounts that, similar to health savings

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accounts, accumulate on a tax-advantaged basis for the purpose of

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paying for mitigation enhancements and catastrophic losses.

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     (3)  Creating tax-deferred insurance company catastrophe

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reserves to benefit policyholders. These tax-deferred reserves

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would build up over time and only be eligible to be used to pay

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for future catastrophic losses.

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     (4)  Enhancing local and state government's role in

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establishing and maintaining effective building codes, mitigation

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education, and land use management; promoting state emergency

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management, preparedness, and response; and creating state or

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multistate regional catastrophic risk financing mechanisms such

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as the Florida Hurricane Catastrophe Fund.

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     (5)  Creating a national catastrophe financing mechanism

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that would provide a quantifiable level of risk management and

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financing for mega-catastrophes; maximizing the risk-bearing

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capacity of the private markets; and allowing for aggregate risk

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pooling of natural disasters funded through sound risk-based

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premiums paid in correct proportion by all policyholders in the

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United States.

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     BE IT FURTHER RESOLVED that copies of this memorial be

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dispatched to the President of the United States, to the

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President of the United States Senate, to the Speaker of the

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United States House of Representatives, and to each member of the

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Florida delegation to the United States Congress.