Will NE flooding and damage revive talk of a national cat fund?
Remember four years ago, when the candidates actually talked about a national catastrophic reinsurance fund to spread the risk of natural disasters across state lines, provide a cushion for reinsurance and make insuring disasters more affordable?
The concept, which first came to life after Hurricane Andrew devastated Miami in 1992, emerged again after the seven-hurricanes of 2004 and 2005. Then-Sen. Barack Obama and former New York City Mayor Rudy Giuliani embraced the idea.
A group of U.S. House members, including then-Reps. Ron Klein, a Democrat, and Ginny Brown-Waite, a Republican, won support for a plan to create a voluntary catastrophe fund modeled after Florida’s Hurricane Catastrophe Fund.
But the plan died in the Senate and has been dead since. Now, as New York tries to recover from its crippling flooding and homeowners from Washington, D.C. to New York try to rebuild in the wake of Hurricane Sandy, will the question, once again be renewed.
U.S. Sen. Bill Nelson, who has been a vocal advocate for a cat fund since he served as Florida’s insurance commissioner in the 1990s, said last week that the climate in Washington, D.C. was too polarized to get it passed. That was before the storm.
“There’s no way, in this environment, they’re going to create another federal program,’’ he told the Herald/Times, “even though the taxpayers of Montana, and the Dakotas and Kansas that don’t think that hurricanes are their problems end up paying the bill when the big catastrophe happens anyway.”
The federal government “usually comes in with huge federal expenditures in the aftermath” and taxpayers finance it whether they were victims of the storm or not, he said.
“Whereas if you planned for that with an insurance pool, you could spread the risk and not put that on the taxpayers. But you can’t convince the senators that don’t have a hurricane threat of that,’’ he said.
“They say we’re not going to have any more of those federal programs.”