Sponsors (3)
The bill expands and finances state‑backed catastrophe insurance and mitigation support—improving coverage, faster payments, and targeted resilience funding—at the cost of greater federal/taxpayer contingent liabilities, potential higher premiums, and administrative/market distortions that may encourage riskier development or crowd out private markets.
Homeowners in high‑risk States gain substantially expanded access to state‑backed catastrophe insurance and federal reinsurance/backstops, increasing available coverage and financial protection after major disasters.
Policyholders would see faster claims payments and greater ability to mobilize private capital for payouts, helping families rebuild and restore finances more quickly after disasters.
New and steady mitigation funding and retrofit assistance (with prioritization for low‑income areas) will improve community disaster readiness, reduce future loss, and lower repair costs for vulnerable households.
Taxpayers face substantial contingent liabilities because federal guarantees, appropriations, or backstops could be tapped if State programs default or losses exceed Fund resources.
Homeowners could see higher insurance costs as actuarially sound pricing, guarantee fees, administrative costs, and cost‑of‑capital requirements are passed through in premiums.
The program may create moral hazard and crowd out private market discipline—States might rely on federal backstops instead of building reserves or purchasing private reinsurance, and private insurers or capital could be deterred.
Based on analysis of 12 sections of legislative text.
Creates Treasury-backed debt guarantees, a federal catastrophe reinsurance fund, a mitigation grant program, and a national consortium to support State catastrophe insurance and speed recovery.
Official title: To ensure the availability and affordability of homeowners' insurance coverage for catastrophic events.
Introduced January 28, 2025 by Frederica Wilson · Last progress January 28, 2025
Creates a federal backstop and support system to help state-run catastrophe insurance programs cover large losses from hurricanes, earthquakes, wildfires, floods, and other major natural disasters. The bill sets up a National Catastrophe Risk Consortium to study and coordinate risk, authorizes Treasury-run debt guarantees and a federal reinsurance fund to attract private capital and speed claims payments, and creates HUD mitigation grants to reduce future losses. The law sets eligibility and operational rules for State programs (standards for governance, mitigation, rate-setting, and coverage), requires disclosure and reporting, limits federal exposure with statutory caps on guarantees, and directs some investment earnings from the reinsurance fund toward mitigation grants targeted to lower-income and higher-need areas.