Sponsors (8)
The bill expands federal reinsurance support and incentives to stabilize and broaden catastrophe coverage and encourage mitigation, at the trade‑off of exposing taxpayers to contingent liabilities, likely raising costs and compliance burdens for some policyholders and insurers, and concentrating certain decisions at the federal level.
Homeowners, renters, small businesses, state regulators, and insurers gain a federal reinsurance backstop and program support that makes large catastrophe claims more likely to be paid and reduces insurer insolvency risk, stabilizing the property insurance market after major disasters.
Homeowners and commercial property owners gain access to program-backed reinsurance for a broader set of perils (wind, flood, wildfire, earthquake, convective storms) as coverage phases in, improving insurance availability in high-risk areas.
Policyholders and insurers are incentivized to invest in loss-prevention and mitigation (and mitigation can be recognized when switching insurers), which reduces future disaster losses and supports long‑term community resilience.
Taxpayers face contingent liability because the Fund can issue Treasury‑guaranteed notes/bonds to meet obligations, exposing the federal government to losses if Fund proceeds are insufficient after a major catastrophe.
Many policyholders (homeowners, renters, small businesses) could see higher insurance costs due to program design features—quarterly premium payments with a minimum floor, premium rules tied to indexes and home values, and limited participation options if reinsurers/captives are excluded.
Quarterly insurer reporting, new state and insurer compliance obligations, and policy‑level data collection increase administrative burdens and privacy concerns that may raise costs passed to customers.
Based on analysis of 5 sections of legislative text.
Establishes a federal catastrophic property reinsurance Program with phased inclusion of perils, quarterly premiums, a federal Fund, feasibility studies, and a multi‑year policy pilot.
Official title: To require the Secretary of the Treasury to establish a catastrophic property loss reinsurance program, and for other purposes.
Introduced July 17, 2025 by Sydney Kamlager-Dove · Last progress July 17, 2025
Creates a federal catastrophic property reinsurance program administered by the Secretary of the Treasury to sell reinsurance to qualifying insurers for large-scale losses from catastrophic perils (wind/hurricane, severe convective storm, wildfire, flood, and potentially earthquake and others). The Program is to be established within four years, with covered perils phased in over a multi-year timetable, quarterly premiums set to cover expected losses plus administrative costs, and insurer participation conditioned on offering all‑perils policies and loss‑prevention partnerships with policyholders. Requires two feasibility reports to Congress—one on a federal relocation fund for properties that become uninsurable and one on the feasibility of adding earthquake coverage—and creates a pilot for multi‑year (at least five‑year) all‑perils property policies with limits on premium increases tied to changed construction costs and optional coverages and protections against rate increases based on insurer reassessments of property hazard mid‑term.