Sponsors (2)
The bill establishes a federally backed catastrophic reinsurance program and incentives for mitigation that improve market stability and encourage protection, but it raises the likelihood of higher premiums, delays in coverage for some perils, added regulatory and reporting burdens, and potential contingent costs to taxpayers.
Homeowners and small-business owners gain access to a federal catastrophic reinsurance program that stabilizes the insurance market, improving availability of all‑perils property coverage and lowering insurer costs.
Homeowners benefit from stronger incentives and insurer recognition for loss‑reduction investments (and insurer credit when switching), which can reduce future property damage and lower premiums over time.
State regulators and insurers will have clearer and standardized reporting (a defined statistical plan and mandatory quarterly data), improving transparency, actuarial soundness, and national understanding of catastrophe exposure.
Homeowners and small businesses may face higher premiums because participating insurers must pay mandated quarterly premium charges (and insurers can pass through costs or raise rates tied to indices or home values).
Taxpayers could be exposed to large contingent liabilities if the federally backed Fund or bond obligations are insufficient, and future program choices (e.g., relocation funds) could create new taxpayer costs.
Coverage expansions are phased and certain protections depend on multi‑year reports, so many homeowners and renters remain exposed to perils (flood, earthquake, wildfire) for years while studies and additions proceed.
Based on analysis of 5 sections of legislative text.
Creates a federal catastrophe reinsurance program for qualifying insurers, phases in perils, sets premiums and retention rules, requires feasibility reports, and pilots multi-year all-perils policies.
Introduced July 17, 2025 by Adam Schiff · Last progress July 17, 2025
Creates a federal catastrophic property reinsurance program to backstop qualifying insurers and reduce the cost and volatility of coverage for severe perils. It phases in specific perils (starting with wind/hurricane, then severe storms and wildfire, then flood, and potentially earthquake), requires participating insurers to offer all-perils residential or commercial policies and engage in loss-prevention partnerships, and charges quarterly premiums to participating insurers based on expected losses and program costs. The Secretary of the Treasury must also deliver feasibility reports on a relocation fund for properties made uninsurable and on adding earthquake coverage, and must run a pilot for multi-year (5+ year) all-perils policies with limits on when insurers can raise premiums. The program is meant to encourage private-market solutions, insurer investments in loss mitigation, and longer-term policies while limiting the federal backstop to a defined share of large losses (no greater than 40 percent of a participating insurer’s probable maximum loss per peril). It includes rules on program governance, premium setting, insurer retention, private reinsurance incentives, and conditions for multi-year policy participation and transfers of coverage on property sale.