Tuesday, 27 March 2007
Legislation Proposed For Federal Insurance Fund
Lawmakers in the U.S. House of Representatives proposed legislation to create a Federally funded program to help insurance companies in case of a catastrophic disaster. The push for this legislation was sparked by the increasing insurance problem that states in the Gulf and southern Atlantic coastal regions are facing.
Insurers in the area continue to drop policies and increase premiums as experts predict more frequent and severe hurricanes in the future.
“It is clear that the government has got to step in,” said U.S. Democratic Representative Barney Frank of Massachusetts.
The Federal ‘insurance backstop’ for natural disasters would use the terrorism fund created after the September 11 attacks as a model. The terrorism insurance program provides up to $100 billion in coverage for a future attack.
“We believe that we have reached a similar point with regard to what happens with floods and hurricanes. I believe that some Federal backstop is necessary,” Frank added.
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