HOMEOWNERS' DEFENSE ACT OF 2007 -- (House of Representatives - November 08, 2007)
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Mr. MATHESON. Mr. Chairman I rise today, first of all, in strong support of H.R. 3355, the Homeowners' Defense Act, and I offer an amendment that I believe will further support the intent of this legislation, namely to better enable State-sponsored reinsurance programs to protect themselves by transferring catastrophic risk into capital markets.
I should first commend Congressman Klein and Congressman Mahoney for their proactive approach in this legislation, which allows States to responsibly plan for disasters ahead of time by pooling risk. By accessing capital markets to transfer risk, State-sponsored insurance funds will be better protected in the event of future disaster and will be increasingly able to provide affordable services for homeowners.
This legislation will provide an important backstop for many of the larger State-sponsored insurance plans but will also provide States like my home State of Utah with an opportunity to prepare for future catastrophes. The State of Utah does not currently have a State-sponsored catastrophic insurance plan but is considering developing one.
Utah has been ranked as one of the top ten U.S. earthquake States in the United States, and in some areas of the State, catastrophe risks also include wildfires, flooding, and mudslides. Of course many of these risks are unique to Utah, but many of these risks, things like fault lines or forest ranges, are spread over many States. I believe that States should be assessing many of these risks on a regional basis given the nature of those risks.
Very simply, Mr. Chairman, my amendment would require that the first annual report of the consortium that's established by this legislation should include an assessment of the costs associated with catastrophic risk for States and regions and an analysis of the costs and benefits of participation in the program for States that are not part of the consortium.
It is my hope that in providing States with an assessment of the catastrophic risks posed to their respective State and region and the costs associated with trying to address those risks, those States could evaluate and consider developing a State-sponsored catastrophic insurance plan if they do not already have one. I believe this legislation provides an important mechanism for States to protect themselves in the event of catastrophe, and I urge support of this amendment so that States can make a more informed decision going forward.
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