Order Code RL33086
CRS Report for Congress
Received through the CRS Web
Hurricane Katrina: Insurance Losses and National
Capacities for Financing Disaster Risk
September 15, 2005
Rawle O. King
Analyst in Industry Economics
Government and Finance Division
Congressional Research Service { The Library of Congress

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Hurricane Katrina: Insurance Losses and National
Capacities for Financing Disaster Risk
Summary
On August 29, 2005, Hurricane Katrina made landfall on the Gulf of Mexico
coast with high velocity winds, storm surge, heavy rain, flooding, coastal erosion,
hail, and tornadoes. The storm caused deaths, injuries, property and infrastructure
damage, economic loss, and human suffering to the coastal region of Louisiana,
Mississippi, and Alabama. Private insurer losses from Hurricane Katrina for
damaged, destroyed, or flooded homes and businesses, and for offshore oil and gas
platforms that were either damaged, lost or missing and presumed sunk in the Gulf
of Mexico, are estimated to be in the range of $40 to $60 billion. This amount would
make Katrina the costliest insured loss from a single event in U.S. history, exceeding
Hurricane Andrew (1992) and the terrorist attacks of September 11, 2001. Total
economic losses, including insured and uninsured property and flood damages are
expected to exceed $200 billion.
In the aftermath of Katrina, policy makers, disaster experts, and insurance
companies have expressed concerns about the financial costs and challenges of
recovering from Hurricane Katrina. Further, they note the potential vulnerability of
the insurance industry to a future mega-catastrophic event, and raise questions about
what role, if any, the federal government should play in financing catastrophe risks.
Despite the severity of damages, insurers are well-equipped to manage the
financial impact of a catastrophe on this scale. The U.S. personal lines insurers have
benefitted from recent favorable market conditions and have built up policyholder
surplus for an unexpected event like Katrina. A. M. Best, an insurance rating and
information agency, reports that almost all rated companies will be able to meet their
commitments. A few individual companies’ ratings may be lowered.
Most insurance market analysts note that there is no state in the union that is not
subject to catastrophe exposure, and the current state of affairs suggests that the
exposures are far greater than the insurance industry is now prepared to handle.
Although the insurance industry will likely emerge largely intact from Hurricane
Katrina and is better capitalized now than ever, it simply does not have sufficient
capital to fund a mega-catastrophe. This fact is not new. Insurers and financial
market experts knew after Hurricane Andrew in 1992 that outside capital was needed
to supplement industry capacity. Since then, new capital has entered the catastrophe
insurance market.
As Members of Congress explore ways to respond to Hurricane Katrina, they
may be called upon to consider federal policy alternatives to build national
capabilities for disaster risk management. Among measures that might be explored
are various legislative proposals to pre-fund the cost of disasters with insurance or
capital market instruments (risk securitization).
This report will be updated as events warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The U.S. Economy and Natural Disasters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Insured Losses from Hurricane Katrina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Insurance Industry’s Overall Exposure to Disasters . . . . . . . . . . . . . . . . . . . . . . . 7
Major Federal Disaster Insurance Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Tables
Table 1. Top 10 Insured Property Losses in United States . . . . . . . . . . . . . . . . . . 5
Table 2. Property/Casualty Insurance Industry Financial Results: 2000-2004 . . . 9
Appendix A. Summary of Federal Disasters Insurance
Legislation: 1973-2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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Hurricane Katrina: Insurance Losses and
National Capacities for Financing Disaster
Risk
Introduction
On August 29, 2005, Hurricane Katrina struck several states along the Gulf
Coast from Louisiana to the western edge of the Florida panhandle (including
Mississippi and Alabama), causing deaths, injuries, property and infrastructure
damage, economic loss, and human suffering.1 The hurricane caused extensive
flooding and wind damage to property, businesses, and infrastructure as a result of
heavy rain, high velocity winds, and a record 30-foot storm surge. Hurricane Katrina
was different from other hurricanes because of the extensive flooding that resulted
from the record storm surge and the breaching of three levees that protected New
Orleans from Lake Pontchartrain and the Mississippi River. Katrina left over a
million people without electricity, communications, and drinking water; casualties
are expected to number in the hundreds.2
In the aftermath of Hurricane Katrina, concerns have been expressed by
government officials, insurance industry participants, and disaster experts about:
! the unprecedented property damages and huge recovery costs and
challenges facing the region — Louisiana, Mississippi, and Alabama
— and nation;
! the long-term budgetary implication of federal disaster recovery
expenses, given that the American people will ultimately be
responsible for the cost of Hurricane Katrina through either taxes,
insurance policy premiums, or federal post-disaster assistance;
! the vulnerability of the property insurance industry to a mega-
catastrophic event of such magnitude that a substantial portion of the
1 According to the U.S. National Hurricane Center, Hurricane Katrina initially made landfall
between Hallandale Beach and Aventura, Florida as a Category 1 storm on August 25, 2005,
then made a second landfall on August 29th near southeastern Louisiana (Buras-Triumph,
Louisiana) as a Category 4 storm with winds of 140 miles per hour.
2 The last hurricane that made a direct hit on New Orleans was Hurricane Betsy in 1965.
The storm surge from Betsy left 50% of the city under water and 60,000 residents homeless.
Following Hurricane Katrina, New Orleans evacuation plans removed 80% of the
metropolitan area’s 1.4 million people, but failed to empty the city of thousands who were
forced to remain for various reasons in neighborhoods susceptible to flooding.

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CRS-2
industry could not support its various obligations, which could lead
to a ripple effect of potential insolvencies of multi-state insurers; and
! whether and how the federal government could improve our nation’s
ability to mitigate losses and finance large insured losses from
catastrophic events.
There appears to be growing support among policymakers and disaster policy
experts on the need to reexamine how this nation manages and finances disaster risk
and to seek new and innovative ways to do both.3 Traditional disaster policy has
focused on coping with disasters, using warnings before the disaster strikes,
emergency relief and hazard insurance after a disaster occurs, and hazard reduction
measures, such as levees and floodplain management/land-use ordinances, to reduce
damages from disasters. With this in mind, economists note that individual
households and businesses have two options to reduce losses from natural disasters:
pre-disaster mitigation that reduces physical/environmental vulnerabilities, and risk
financing designed to reduce financial vulnerabilities. The first step in the disaster
risk management framework is to mitigate damages from disasters. The residual
economic risk can then be managed with risk financing strategies. Financing is thus
an integral part of managing catastrophe risk; it would not be feasible to quickly
reconstruct the damaged property and infrastructure following Hurricane Katrina, and
also to restore the livelihood of the affected persons, without adequate financial
arrangements.
As Members of Congress explore ways to respond to the destruction caused by
Hurricane Katrina, the long-term budgetary implications of disaster recovery
expenses incurred by the federal government, as well as federal potential alternatives
to build national capabilities for financing disaster risk may emerge as a prime
consideration.
Three broad disaster-related policy issues or questions will likely be debated:
! Most disaster experts would agree that the losses paid by the
insurance industry and the federal government to help policyholders
and citizens, respectively, recover from catastrophe are enormous.
This increase in catastrophe losses has triggered public policy debate
about the financing and management of catastrophic risks associated
with natural disasters. What should be the appropriate role of
government in the financing and management of catastrophic risk,
given the recognized inadequacies of traditional government
approaches to coping with disasters? (These traditional approaches
include using warnings before disaster strikes, emergency relief and
hazard insurance after a disaster occurs, and hazard reduction
measures such as levees to reduce damages from a future disaster.)
3 Jeff Harrington, “A Spur for a National Fund?,” St. Petersburg Florida Times, Aug. 30,
2005, p. 1.

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CRS-3
! What disaster risk management strategies should government pursue
given, as some experts suggest, that the increasing frequency and
severity of catastrophic events have been complicated by growing
population density, the geographic concentration of economic
resources in disaster-prone areas, and, as some assert, climate
change?
! The government’s increasing role as a bearer of risk has been
triggered by insurance companies’ unwillingness or inability to
finance catastrophe risks in the wake of major disasters since the
early 1990s. Financial market participants have developed capital
market innovations designed to manage and transfer risk. What
legislative alternatives are available to pre-fund the cost of disasters
with insurance or capital market instruments (risk securitization)?
Can sufficient capacity be directed to financing catastrophe risk
through the access of capital in the financial markets?
Prior to Katrina, Members of the 109th Congress had already begun debating an
extension of the federal terrorism risk insurance legislation — a debate that is likely
to now include consideration of ways to pre-fund the cost of both natural and man-
made disasters. This debate is likely to occur within the framework of finding ways
to ensure the availability and affordability of disaster insurance to protect residential
and commercial property against future disasters. This could involve finding ways
to improve insurers’ access to capital in the reinsurance, banking, and securities
markets to ensure adequate capacity and solvency of the industry to meet consumer
needs.
The U.S. Economy and Natural Disasters
When a disaster occurs, productive resources in a particular region or state are
destroyed or crippled. Resources from other parts of the country must be redirected
to compensate the victims and rebuild or repair that which is lost. Whether the
disaster-affected region or state is better or worse off depends on what portion of
their losses, if any, are covered by insurance or government disaster assistance.
Physical damage to the general building stock and the infrastructure following
Hurricane Katrina could very well lead to a reduction in the flow of goods and
services and an aggregate loss of income to the local, state and national economy.
The degree to which the storm disrupts the economy depends on the magnitude and
duration of the disaster, the structure of the local economy, the geographical areas
affected, the population base, and the time of day the disaster occurs. The largest
effects on output, employment, wages, and capital stock occur at the local or regional
level, and to a lesser extent at the national level, depending on whether economic
activity is sufficiently impeded or whether the disaster affects a large enough
percentage of the population or an important industry. For example, the U.S.
economy in 1994 was adversely affected by the Northridge earthquake and the winter
storms in the South, Midwest, and East, which affected 50% of the U.S. population,
disrupted construction in the housing industry, and caused significant reductions in

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CRS-4
the output of automobiles, steel and appliances. National estimates for economic
growth/output were revised downwards as a result of these series of natural disasters.
During a disaster recovery period, the affected region or state will engage in
redevelopment and cleanup efforts (assuming a willingness on the part of investors
and the public to redevelop the area) that tend to increase local employment and other
economic activities. Insurance payments and disaster assistance (government
purchases and income transfer payments) provide a flow of funds into the area.
Realizing the potential for profits, investors will likely be attracted to the building
boom in the devastated area.
Although private domestic investment becomes important in terms of
facilitating production, employment, and the demand for products, the apparent
positive contribution to the area’s aggregate income from increased investment
spending is largely ambiguous. The reason is that the investment does not represent
net additions to the stock of capital. As destroyed physical assets are replaced with
assets that incorporate the latest advanced technology, the productivity of a
community’s physical assets and the incomes generated from those assets will be
enhanced. Depending on how much of the loss is recovered from the rest of the
country, the affected region may be better off. The nation as a whole, however, is
unambiguously hurt by the disaster.
Insured Losses from Hurricane Katrina
As Table 1 shows, private insurer losses from Hurricane Katrina are estimated
to be $40-$60 billion. This would make the tropical storm the costliest natural
disaster in U.S. history, exceeding Hurricane Andrew in 1992 and the September 11,
2001 terrorist attacks. These insured loss figures include damages caused by the
storm’s landfall in Florida on August 25, 2005, that led to an estimated $600 million
to $2 billion in insured losses, as well as dozens of offshore oil and gas platforms
reported either lost, damaged, or missing and believed sunk. Total damages are
expected to exceed $200 billion, with the federal government expected to spend over
$100 billion for response and recovery efforts associated with Hurricane Katrina in
Alabama, Florida, Louisiana, Mississippi, and other affected areas.4 These amounts
will exceed the initial cost for recovery from the September 11 terror attacks.5
4 On September 2, 2005, President Bush signed into law the Emergency Supplemental
Appropriations Act (Public Law 109-61), which provided $10.5 billion in emergency
supplemental funds for Hurricane Katrina-related disaster relief. Due to the catastrophic
nature of Katrina, the President subsequently requested an additional $51.8 billion for
emergency FY2005 supplemental resources for the Departments of Defense and Homeland
Security and the Army Corps of Engineers.
5 Theo Francis, “Insurance Costs to Rise,” Wall Street Journal, Sept. 6, 2005, p. C1.

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CRS-5
Table 1. Top 10 Insured Property Losses in United States
($ billions)
Losses In
2004
Rank
Date
Disaster
Losses
Dollars
1
Aug. 2005
Hurricane Katrina
*$35.0
??
2
Aug. 1992
Hurricane Andrew
15.5
20.9
3
Sept. 2001
WTC Terrorist Attacks
18.8
20.1
4
Jan. 2004
Northridge, CA Earthquake
12.5
15.9
5
Aug. 2004
Hurricane Charley
7.5
7.5
6
Aug. 2004
Hurricane Ivan
7.1
7.1
7
Sept. 1989
Hurricane Hugo
4.1
6.4
8
Aug. 2004
Hurricane Frances
4.6
4.6
9
Aug. 2004
Hurricane Jeanne
3.7
3.7
10
Sept. 1998
Hurricane Georges
2.9
3.4
Source Insurance Service Office, Property Claims Service
*Preliminary estimate from Risk Management Solutions, Newark, California.
Insured loss estimates are likely to change as the extent of losses becomes better
known. Disaster experts and modeling firms expect the numbers to change as more
is known about the levels of water contamination and economic losses from business
interruption and displacement of residents in New Orleans, Biloxi, Pascagoula, and
Gulfport. These figures will also change when more accurate information about the
economic costs of interruption of oil supply and exports of commodities such as
grain becomes available. Most of the U.S. energy operations are in the Gulf Coast
region.
Most insurance market analysts would agree that insurers will be able to pay all
Katrina-related claims without triggering insurer insolvencies or market disruption.
Despite the severity of damages, insurers are well-equipped to manage the financial
impact of a catastrophe of this scale. The U.S. personal lines insurers have benefitted
from recent favorable market conditions and have built up policyholder surplus for
an unexpected event like Katrina. As Table 2 (see p. 9) shows, the industry as a
whole earned $38.7 billion in net after-tax income in 2004, and policyholder surplus
increased by 13.4%, or $46.5 billion, to a record $393.5 billion for the same year. A.
M. Best, an insurance rating and information agency, reports that almost all rated
companies will be able to meet their commitments. A few individual companies’
ratings may, however, be lowered.
Although the insurance industry will emerge largely intact from Hurricane
Katrina and is better capitalized now than ever, the industry simply does not have
sufficient capital to fund a mega-catastrophe. This fact is not new. Insurers and
financial market experts knew after Hurricane Andrew in 1992 that outside capital
was needed to supplement industry capacity. Since then, new capital entered the
catastrophe insurance market.
Insurers learned important lessons from Hurricane Andrew that prompted them
to make changes to both protect the industry’s balance sheets and stabilize the

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CRS-6
property insurance markets in the aftermath of a small-to-moderate hurricane.6 For
example, after Hurricane Andrew, the Florida state legislature worked with insurers
and regulators to create a hurricane catastrophe system designed to mitigate losses
to the insurance industry and prevent insurers from withdrawing from the Florida
insurance market. The Florida Hurricane Catastrophe Fund was created as a
reinsurance-like entity funded by a portion of insurance premiums and managed by
the Florida State Board of Administration. Florida also began using percentage
deductibles tied to the value of homes instead of a dollar amount such as $500 per
claim. Florida created a state regulated insurer of last resort to provide insurance
when no company is willing to underwrite disaster risks. These measures saved the
property insurance industry from financial disaster after the four major hurricanes in
2004. Neither Louisiana, Mississippi, nor Alabama, however, have a similar
catastrophe fund to compensate hurricane victims at a level comparable to what is
available in Florida.
Most insurance analysts predict that Hurricane Katrina will likely result in
higher pricing and restricted coverage in the hardest-hit areas.7 Insurers who
specialize in coverage for offshore oil rigs and platforms, for example, have already
announced 50% increases in premium prices.8 In addition, insurance rating agencies
are now comparing their insurers’ modeled catastrophe exposures to the potential
market share exposure to determine the need for rating action. Insurance market
analysts note that insurers with accurate loss exposure projections will be able to
manage their losses within their capital base. Those that are shown to not have
accurate loss exposure projections could suffer a rating downgrade.
When claims adjusters are finally able to assess the hundreds of thousands of
damaged structures, they will likely face major challenges in distinguishing the
portion of damage attributable to wind or flood. What was the wind damage before
the levees broke and flooding began? This is important because wind damages are
covered under standard commercial and residential property insurance policies, but
floods are not.9 The central question of when the wind-driven rain or rising
floodwater came in and when the wind came in will determine how flood claims are
apportioned among the National Flood Insurance Program (NFIP), private insurers,
and individuals.
It is quite likely that policyholders who lack federal flood insurance coverage
might take advantage of vague policy language in their homeowners insurance
policies to argue that the ultimate cause of damage was not flooding, but breaches of
6 For more information on insurance lessons learned form Hurricane Andrew, see CRS
Report RL32825, Hurricane and Disaster Risk Financing Through Insurance: Challenges
and Policy Options, by Rawle O. King.
7 Theo Francis, “U.S. Insurers Brace for Cost of Hurricane Katrina,” Asian Wall Street
Journal, Aug. 31, 2005, p. A4.
8 Ulrike Dauer, “Oil-Rig Insurers Expect Price Jumps,” Wall Street Journal, Sept. 8, 2005,
p. A5.”
9 Bill Mellander, “Payouts Hinge on the Cause of Damage,” New York Times, Aug. 31,
2005, p. C5.

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CRS-7
the New Orleans levees.10 Insurers are likely, however, to argue that they did not
price the flood risk in the homeowners policy, and hence did not set aside reserves
to pay such claims.11
Although the purchase of federal flood insurance is mandatory for certain
property owners as a condition of eligibility for loans from federally regulated
lending institutions, many residents in flood-prone areas impacted by Katrina did not
have flood insurance.12 According to the Insurance Information Institute, only about
30% of homes in Louisiana are protected by flood coverage, and even fewer
homeowners in Mississippi and Alabama purchased the coverage. A problem is that,
although mortgage lenders required homeowners in flood zones to buy flood
coverage, these institutions reportedly have no system in place to ensure that
homeowners keep the coverage in force. In addition, banks that provide mortgage
loans on property found to be uninsured for flood damage might incur losses should
homeowners who cannot afford reconstruction abandon both the property and the
mortgage commitment.
Insurance Industry’s Overall Exposure to Disasters
The increasing magnitude of both insured and uninsured losses from natural
disasters represents an ongoing challenge for both governments and the private
sector.13 Natural disasters typically result in large government outlays for disaster
relief assistance, and they place a financial strain on private disaster insurance
markets. The federal government alone, facing fiscal constraints to cover the losses
to the private sector, will find it costly and challenging to meet long-term disaster-
related spending. In addition, insurers have been and will continue to be reluctant to
cover properties in high-risk areas because of high long-run costs (which translates
into high prices for disaster insurance) and low demand for disaster insurance.14
Most insurance market analysts note that there is no state in the Union that is not
subject to catastrophe exposure, and the current situation suggests that the projected
exposures are far greater than the insurance industry is currently prepared to handle.
The insurance industry’s financial capacity and surplus to underwrite a $100 billion-
plus billion dollar mega-catastrophic event remains in doubt.
10 Theo Francis and John D. McKinnon, “Paying For Flood Damage Looms As Big
Challenge,” Wall Street Journal, Sept. 9, 2005, p. A1.
11 Ibid.
12 For more information on the National Flood Insurance Program and mandatory flood
purchase requirements, see CRS Report RL32972, Federal Flood Insurance: The Repetitive
Loss Problem, by Rawle O. King.
13 CRS Report Rl32825, Hurricanes and Disaster Risk Financing Through Insurance:
Challenges and Policy Options, by Rawle O. King.
14 The high long-run costs and low demand for disaster insurance result from insurers having
to hold huge amounts of capital to pay claims resulting from rare but potentially large
catastrophe losses, and the limited willingness of many consumers to pay risk-based
premiums for disaster insurance, respectively.

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CRS-8
Prior to Hurricane Hugo in 1989, the insurance industry had not experienced any
losses from a single disaster of over $1 billion. Today, a one billion dollar disaster
is quite common, predictable, and manageable, but most insurance experts would
agree that the $100 billion-plus catastrophic event remains a challenge for the U.S.
property and casualty insurance industry. Estimates of the probable maximum losses
(PMLs) from a catastrophic earthquake or hurricane striking the U.S. range up to
$120 billion, and this figure could be even higher depending on the location, time,
and intensity of the event.15 The PML loss from a Category 5 hurricane directly
hitting a densely populated area along the Gulf and Atlantic Coasts (e.g., Miami-Ft.
Lauderdale) could exceed the total capacity (policyholder surplus16) of the U.S.
insurance industry.17
Table 2 shows that in 2004, the industry had $393.5 billion in policyholder
surplus, supporting about $423.3 billion in written premiums. Only a fraction of this
industry-wide total surplus amount, however, would be available to compensate
victims of a catastrophic event. Moreover, insurers must rely on this same limited
pool of surplus to pay for other potentially catastrophic and unpredictable risks, such
as terrorism, mold, and medical malpractice and asbestos liability claims. Insurance
market analysts note that in the event of a catastrophe in the $50 billion to $100
billion range, there is always the possibility that financially exposed insurers may
have to liquidate bonds and other financial assets in order to pay catastrophe-related
claims, triggering an adverse impact on U.S. financial markets.18
In order to make catastrophe insurance available and affordable, state
governments have created state-sponsored insurance pools to provide catastrophe
insurance (or reinsurance) coverage at subsidized rates. Most insurance market
experts agree that these state-run insurance programs, however, are inadequately
capitalized to handle the mega-catastrophic event. Consequently, some of these
experts have suggested the creation of some sort of federal financial backstop or tax
policy to allow property insurers who are exposed to mega-catastrophe losses to
prepare in advance by establishing tax-deferred pre-event catastrophe reserves. Such
efforts have been proposed in previous Congresses.
15 For example, a magnitude 7.0 earthquake in the Newport-Inglewood Fault in Los Angeles
could cause $95 to $120 billion in insured losses, and a repeat of the 1906 earthquake in San
Francisco could result in $105 billion in insured losses; see Raymond J. Burby, ed., Coping
with Nature: Confronting Natural Hazards with Land-Use Planning for Sustainable
Communities (Washington: Joseph Henry Press, 1998), p. 4.
16 Policyholder surplus is referred to as “net worth” or “owners equity” in other industries.
It represents the financial resources (capital) that stand behind every policy underwritten by
an insurer.
17 David J. Cummins, Neil A. Doherty, and Anita Lo, “Can Insurers Pay for the ‘Big One’?
Measuring the Capacity of an Insurance Market to Respond to Catastrophic Losses,”
Journal of Banking and Finance, 2002, vol. 26, p. 557-583.
18 Ross J. Davidson, Jr., “Working Toward a Comprehensive National Strategy for Funding
Catastrophe Exposures,” Journal of Insurance Regulation, vol. 7, no. 2, winter 1998, p. 134.

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Table 2. Property/Casualty Insurance Industry Financial Results:
2000-2004
($ billions)
2000
2001
2002
2003
2004
Net Written
Premiums
$299.7
$323.5
$369.7
$404.1
$423.3
Percentage
Change
5.3%
8.0%
14.3%
9.4%
4.7%
Earned Premiums
294.0
311.5
348.5
386.3
412.6
Losses Incurred
200.9
234.5
238.8
238.7
246.4
Loss Adjustment
Expenses Incurred
37.8
40.9
44.8
50.0
53.2
Other
Underwriting
Expenses
82.6
86.4
93.8
100.7
106.4
Policyholder
Dividends
3.9
2.4
1.9
1.9
1.6
Underwriting Gain
(Loss)
(31.2)
(52.6)
(30.8)
(4.9)
5.0
Investment Income
40.7
37.7
37.2
38.6
39.6
Miscellaneous
Income (Loss)
0.4
1.1
(0.8)
0.0
(0.5)
Operating Income
(Loss)
9.9
(13.8)
5.6
33.8
44.1
Realized Capital
Gains (Losses)
16.2
6.6
(1.2)
6.6
9.3
Federal Income
Taxes (Credit)
5.5
(0.2)
1.3
10.3
14.7
Net Income After
Taxes
20.6
(7.0)
3.0
30.0
38.7
Policyholder
Surplus
(End of Period)
323.0
295.4
290.6
247.0
393.5
Source: Insurance Services Office, Property Claims Service.
Major Federal Disaster Insurance Legislation
Several major catastrophes since the late 1980s have caused insurers and
policymakers to continually question whether the industry has the capacity to deal
with the next catastrophe.19 Government-provided programs for flood insurance, as
well as other interventions in private disaster insurance markets, often are justified
to overcome the failure of private markets to offer adequate and affordable disaster
insurance. As pointed out above, disaster-prone states have sought to address
insurance shortages with the creation of state-sponsored catastrophe insurance
19 These natural disasters include: Hurricanes Hugo and Georges (1989); Loma Prieta,
California earthquake (1989); Hurricanes Andrew and Iniki (1992); Midwest floods (1993);
Northridge, California earthquake (1994); Hurricane Fran (1996); Red River floods (1997);
World Trade Center and Pentagon terrorist attacks (2001); and Hurricane Katrina (2005).

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CRS-10
programs to provide coverage to homeowners and business at subsidized rates. In
the aftermath of Hurricane Katrina, some Members of Congress have expressed
concerns about the availability and affordability of natural disaster insurance for
homeowners.20 Members may be asked to consider proposals for improving insurers’
access to capital in the reinsurance, banking, and securities markets to ensure
adequate capacity and solvency of the industry to meet consumer needs.
Appendix A provides a summary of major federal disaster insurance legislation
introduced in Congress from the early 1970s through 2005. Throughout this period,
the Congress considered dozens of bills to amend the National Flood Insurance
Program (NFIP). Some of them were enacted into law, or FEMA (or its predecessor
HUD) bypassed the legislative process and made administrative changes to the
program to reflect these measures. Not all of these bills in the appendix were
included in the analysis that follows.
Since the late 1970s, Congress has considered several legislative proposals to
establish a federal disaster insurance/reinsurance program, but none were enacted
until the passage of the Terrorism Risk Insurance Act (TRIA) of 2002.21 TRIA
provided a temporary federal reinsurance backstop once a high insurance industry
loss is sustained. The law is scheduled to expire on December 31, 2005. Two bills,
H.R. 1153 (Capuano) and S. 467 (Dodd), have been introduced in the 109th Congress
to extend the terrorism insurance program.22 Some members of the insurance
industry are seeking to have TRIA extended for at least two years, while the industry
continues to work to expand the private market for managing terrorism risk.
Previous Congresses responded to the catastrophe funding problem — i.e.,
insurers’ concerns about potential market failure in catastrophe insurance markets —
by considering legislation to create a federal catastrophe insurance/reinsurance
program for residential property. The first of these proposals — H.R. 4480 and H.R.
4462, introduced in the 101st Congress — sought to address only the earthquake
hazard.23 Later bills, such as H.R. 21 in the 106th Congress and H.R. 1552 in the
108th Congress, adopted an “all-hazard” approach to covering most natural hazards,
including hurricanes, earthquakes, and volcanoes. Both H.R. 21 and H.R. 1552
would have established a federal program to provide reinsurance to improve the
availability of homeowners’ insurance. The two bills took slightly different
approaches, however. Whereas H.R. 21 would have established a new federal
disaster reinsurance fund to provide up to $25 billion in annual coverage to state
insurance pools, H.R. 1552 would have authorized the Secretary of the Treasury to
establish a program to make reinsurance coverage available through the auctioning
of contracts.
20 Mark Foley, “Insurance Industry in Need of Change”, The Miami Herald, Sept. 8, 2005,
p. A18.
21 P.L. 107-297; 116 Stat. 2322.
22 CRS Report RS21979, Terrorism Risk Insurance: An Overview, by Baird Webel.
23 Elliott Mitter, “Alternative National Earthquake Insurance Programs,” Earthquake
Spectrum, Aug. 1991, vol. 7, no. 3, p. 757.

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CRS-11
The 108th Congress considered several major federal disaster insurance bills, but
the approach that received the most attention involved changing federal tax policy
to authorize tax-deferred treatment of private insurers’ catastrophe reserves.24
Allowing private insurers to build up catastrophe reserves to pay natural disaster-
related claims that have a low probability of occurrence, it is argued, would lower
insurers’ costs of holding capital and, in turn, lower the premiums they must charge
for a given level of disaster coverage. Alternatively, critics charge that the tax
deductibility of catastrophe reserves would cause the U.S. Treasury to lose tax
revenue paid by insurers. Would the lost tax revenue be an acceptable price to pay
to achieve the public goal of reducing overall disaster losses? How would someone
measure success? These were central questions in the debate.
In the 109th Congress, Representative Ginny Brown-Waite introduced the
Homeowners’ Insurance Availability Act of 2005 (H.R. 846). This bill is identical
to H.R. 21, introduced in the 106th Congress by Representatives Rick Lazio and Bill
McCollum to establish a federal program that provides catastrophe reinsurance to
state insurance programs and private insurers.
All federal disaster insurance bills, including TRIA, share one feature: they seek
to improve the nation’s ability to finance catastrophe risk through insurance, as
opposed to increased direct spending for federal disaster assistance. Their
justification has been based on the argument that such initiatives will: (1) enhance
the current catastrophe funding system; (2) make property insurance more available
and affordable in high-risk areas; (3) promote the funding of research studies (i.e.,
earthquake science, actuarial science, economics, and finance) on disaster insurance
issues; and (4) expand our knowledge and understanding of the scientific and
financial aspects of natural hazards.
Opponents of federal disaster insurance say such measures conflict with long-
established sociological, economic, and actuarial principles that focus on the “true”
cost of government programs (the opportunity cost of the funds), the foregone
benefits of a competitive insurance marketplace (e.g., cost efficiency and rate
competition), and the absence of consumer choice (the ability to decide whether to
purchase coverage).25 Citing the development of new financial instruments to fund
catastrophe coverage and expanded reinsurance capacity, critics of public insurance
systems say there is no need for a federal insurance program at this time. They insist
that such programs would shield the private sector from loss while creating sizable
taxpayer-financed subsidies that undermine private-sector incentives for efficient risk
management. Moreover, it has been argued that these programs would encourage
population growth and development in high-risk, hurricane-prone areas that should
not be developed, and would allow insurers to “cherry pick” the best risks and send
24 For more information on the catastrophe insurance market failure and possible tax policy
approaches to solving the catastrophe funding problems see CRS Report RL33060,Tax
Deductions for Catastrophic Risk Insurance Reserves: Explanation and Economic Analysis,
by David Brumbaugh and Rawle King.
25 Howard Kunreuther and Richard J. Roth, Sr., Paying the Price: The Status and Role of
Insurance Against Natural Disasters in the United States, (Washington: Joseph Henry Press,
1998), p. 92.

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CRS-12
the federal government the poor risks. Rather than providing insurance protection
for natural hazard losses, J. Robert Hunter, Director of Insurance for Consumer
Federation of America, for example, argue that the federal government should take
actions to expand private-sector capacity for insuring disaster losses. Proponents of
federal disaster insurance have argued that such a scheme would reduce dependence
on “free” disaster assistance and support efficient risk management by households
and businesses.26
Conclusion
Some of the major disaster-related policy issues associated with Hurricane
Katrina are: (1) the large insured and uninsured losses associated with the storm; (2)
rising federal government outlays for disaster assistance; and (3) the private
insurance market’s lack of capacity to handle the next catastrophic event should it
exceed $100 billion in private insured losses. In addition to federal responsibility for
emergency management, which includes a range of authorities and activities (e.g.,
technical assistance, preparedness or mitigation funding, and grants and loans),
previous policy options presented to Congress in response to natural disasters have
included:
! establishing a federal financial — insurance or reinsurance —
backstop for the insurance industry in the event of a mega-
catastrophe event;
! changing the tax treatment of catastrophe risk insurance by
permitting insurance companies to establish tax-deductible reserve
funds for catastrophes;
! facilitating the passing of certain catastrophic risks to the capital
markets through the sale of insurance-linked securities to potential
investors; and
! establishing a publicly funded emergency reserve fund to provide
timely financial assistance in response to domestic disasters and
emergencies, the approach advocated in S. 24, Emergency Reserve
Fund of 2005 (Hutchison).
Policy considerations for the 109th Congress may include an assessment of the
government’s increasing role since the devastating terrorists attacks of September 11,
2001 and Hurricane Katrina as a bearer of risk, and finding ways to finance (pre-
fund) and manage catastrophe risk through public-private partnerships.
Historically, Congress has been reluctant to enact federal disaster insurance
legislation because of (1) a lack of consensus on what will work and (2) concerns
26 Ross J. Davidson Jr., “Working Toward a Comprehensive National Strategy for Funding
Catastrophic Exposures,” Journal of Insurance Regulation, vol. 7, no. 2, winter 1998, p.
134.

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CRS-13
about adequate provisions for mitigation and avoidance of unnecessary government
intrusion into markets being adequately served by private sector financial entities.
Congressional reluctance to establish a federal disaster insurance program has been
based on the recognition that such a program would conflict with sociological,
economic, and actuarial principles that emphasize the “true” cost of government
programs (the opportunity cost of the funds), the foregone benefits of a competitive
insurance marketplace (e.g., cost efficiency and rate competition), and the absence
of consumer choice (the ability to decide whether to purchase coverage).27
The federal government has played an important role in the U.S. economic
system by assuming risks that the private sector either will not undertake at any price,
or will accept but at a price so high that most potential beneficiaries will not purchase
the coverage. For example, government risk-bearing now occurs in environmental
disasters, nuclear-plant accidents, toxic waste dumps, and flooding. Establishing an
explicit federal disaster insurance system to ameliorate the potential damages to
homes and commercial buildings stemming from natural disasters would represent
another government risk-bearing program — one that could expose taxpayers to
funding demands if program revenues fail to cover costs, or if returns are lower than
expected. Nevertheless, supporters of a federal disaster insurance program argue that
it would be justified by the national scope of the Hurricane Katrina disaster, and by
the inability of the private insurance industry to handle future high payouts from a
mega-catastrophic event without federal government involvement.
As Members of Congress explore long-term ways to respond to Hurricane
Katrina, consideration might be given to whether there is a need to improve the
nation’s ability to finance catastrophic risk and, if so, how. Previous Congresses
responded to similar concerns by considering legislation to create a federal
catastrophe reinsurance program for residential property. Despite broad support for
several bills over the past few Congresses, the full Congress did not authorize a
federal reinsurance program until the enactment of the Terrorism Risk Insurance Act
of 2002.
Finally, most observers would agree that for the very highest layers of
catastrophe risk, the government (and consequently the taxpayer) is now, by default,
the insurer of last resort. In the 109th Congress, any one of a number of policy
options could be pursued, and will likely be influenced by whether it can be shown
that potential losses from Hurricane Katrina are beyond the capacity of private
markets to diversify natural hazard risks. Members will likely be grappling with
several policy questions. For example, will reinsurance and securitization be enough
to maintain insurance solvency after a mega-catastrophic hurricane or earthquake?
How can the various funding sources available for catastrophe insurance be expanded
and refined to cope with a catastrophic hurricane? Finally, what role, if any, should
the federal government play in catastrophe insurance?
27 Paul R. Kleindorfer and Howard Kunreuther, “Challenges Facing the Insurance Industry
in Managing Catastrophic Risks,” in The Financing of Catastrophe Risk, ed., Kenneth A.
Front (Chicago: University of Chicago Press, 1999), p. 149.

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CRS-14
Appendix A. Summary of Federal Disasters Insurance
Legislation: 1973-2005
Bill Number
(Sponsor)
Bill Title
Purpose
109th Congress (2005-2006)
H.R 846
Homeowners’
Instructs the Secretary of the Treasury to
(Brown-Waite)
Insurance Availability
implement a reinsurance program available
Act of 2005
only through contracts for reinsurance
coverage purchased at regional auctions.
H.R. 2668
Policyholder Disaster
Amends the Internal Revenue Code of 1986 to
(Foley)
Protection Act of 2005
permit insurers to establish tax-deductible
reserve funds for catastrophes.
H.R. 3669
National Flood
Amends the National flood Insurance Act of
(Ney)
Insurance Program
1968 (NFIA) to increase from $1.5 billion to
Enhancement
$3.5 billion, through FY2008, the total amount
Borrowing Authority
which the Director of FEMA may borrow from
Act of 2005
the Secretary of the Treasury with the
President’s approval.
S. 24
Emergency Reserve
Establish an emergency reserve fund to
(Hutchison)
Fund Act of 2005
provide timely financial assistance in response
to domestic disasters and emergencies.
108th Congress (2003-2004)
H.R. 253/S. 2238
Flood Insurance
Amends the NFIA to extend the NFIP’s
P.L. 108-264
Reform Act of 2003
authorization through September 30, 2008, and
(Bereuter/Bunning)
establishes a pilot program for mitigation of
severe repetitive loss properties.
H.R. 670
Flood Loss Mitigation
Amends the NFIA to authorize the Director of
(Baker)
Act of 2003
FEMA to carry out mitigation activities that
reduce flood damages to qualified repetitive
loss structures.
H.R. 1552
Homeowners’
Same as H.R. 846 in the 109th Congress.
(Weldon)
Insurance Availability
Act of 2003
H.R. 2020
Hurricane, Tornado,
Requires the Director of Office of Science and
(Moore)
and Related Hazards
Technology Policy to establish an Interagency
Research Act
Group to be responsible for the development
and implementation of a coordinated federal
windstorm and related hazards reduction
research development, and technology transfer
program (the Windstorm and Related Hazard
Impact Reduction Program).
H.R. 4186
Policyholder Disaster
Same as H.R. 2668 in 109th Congress.
(Foley)
Protection Act of 2004
S. 1607
Homeowners’
Same as H.R. 4186 in 108th Congress.
(Graham)
Insurance Availability
Act of 2003

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CRS-15
107th Congress (2001-2002)
H.R. 785
Policyholder Disaster
Same as H.R. 268 in 109th Congress.
(Foley)
Protection Act of 2001
H.R. 1428
Two Floods and You
Amends NFIA to require the Director of
(Bereuter)
Are Out of the
FEMA, in awarding grants for mitigation
Taxpayers’ Pocket Act
activities, to give priority to properties for
of 2001
which repetitive flood insurance claim
payments have been made (repetitive claim
properties), and other purposes.
H.R. 1789
Amend the IRC to
Amends the Internal Revenue Code of 1986 to
(Shaw)
Exempt from Income
exempt from income tax state-created
Tax State-Created
organizations providing property and casualty
Organizations
insurance for property for which such coverage
is otherwise unavailable.
H.R. 3210
Terrorism Risk
Establishes a three-year Terrorism Insurance
P.L. 107-297
Insurance Act of 2002
Program in the Department of the Treasury to
(Oxley)
pay the federal share of compensation for
insured losses resulting from acts of terrorism.
H.R. 3592
Hurricane, Tornado,
Same as H.R. 2020 in 108th Congress.
(Moore)
and Related Natural
Hazards Research Act
H.R. 4025
Homeowners’
Same as H.R. 846 in 109th Congress.
(Weldon)
Insurance Availability
Act of 2002
S. 797
Policyholder Disaster
Amends the Internal Revenue Code of 1986 to
(Gramm)
Protection Act of 2001
add to the list of 501(c) (tax-exempt)
organizations any nonprofit association created
before January 1, 1999, by state law and
organized and operated exclusively to provide
property and casualty insurance coverage for
losses occurring due to natural disasters within
the state, for which the state has determined
that coverage in the authorized insurance
market is not reasonably available to a
substantial number of insurable real properties.
S. 1748
Terrorism Risk
Establishes in the Department of the Treasury
(Gramm)
Insurance Act of 2001
the Terrorism Insured Loss Shared
Compensation Program to pay the federal
share of compensation for insured losses
resulting from an act of terrorism occurring
during specified periods through December 31,
2004.
S. 1751
Terrorism Risk
Substantially similar to S. 1748.
(Gramm)
Insurance Act of 2001
106th Congress (1999-2000)
H.R. 21
Homeowners’
Establishes a federal program to provide
(Lazio)
Insurance
reinsurance to state insurance programs and
Availability Act of
private insurers/reinsurers, covering
1999
earthquakes and fires following hurricanes,
tsunamis, volcanic eruptions, and tornadoes.

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CRS-16
H.R. 481
Earthquake, Volcanic
Requires the Director of FEMA to establish a
(Mink)
Eruption, and
three-part insurance, reinsurance and
Hurricane Hazards
mitigation program to provide national
Insurance Act of 1999
coverage and mitigation for residential
property losses in earthquake-prone, volcanic
eruption-prone, or hurricane-prone states.
H.R. 2728
Two Floods and You
Same as H.R. 1428 in 107th Congress.
(Bereuter)
Are Out of the
Taxpayers’ Pocket Act
of 1999
H.R. 2749
Policyholder Disaster
Amends the Internal Revenue Code of 1986 to
(Foley)
Protection Act of 1999
allow insurers to create tax-deferred reserves
to fund future catastrophic losses from natural
disasters.
H.R. 3303
Natural Disaster
Establishes the National Disaster Insurance
(Burr)
Insurance Solvency Act
Solvency Fund (NDISF) as a non-federal
of 1999
agency to hold, invest, and distribute private
insurance solvency reserve amounts for rare
catastrophic events. Directs the NDISF to
establish and maintain a Catastrophe
Emergency Solvency Reserve Account as a
tax-exempt custodial account to hold all
contributions of solvency reserve amounts.
S. 1361
Natural Disaster
Amends Earthquake Hazards Reduction Act of
(Stevens)
Protection and
1977 to provide for an expanded federal
Insurance Act of 1999
program of hazard mitigation, relief, and
insurance against the risk of catastrophic
natural disasters, such as hurricanes,
earthquakes, and volcanic eruptions.
105th Congress (1997-1998)
H.R. 219
Homeowners’
Creates a federal reinsurance program to allow
(Lazio)
Insurance Availability
states to purchase reinsurance contracts to
Act of 1997
cover natural disaster losses above $25 billion
in a single year.
H.R. 230
Natural Disaster
Creates an integrated three-part program to
(McCollum)
Protection and
encourage disaster risk mitigation, expand
Insurance Act of 1997
catastrophe insurance coverage at adequate
rate levels, and mandate several catastrophe
insurance studies on tax-deductibility of pre-
event catastrophe reserves and flood insurance.
To expand the supply of catastrophe
reinsurance in the private market, the Treasury
Secretary would auction federal excess-of-loss
contracts in the $25-$50 billion layer of
insured losses to insurers, reinsurers, and state,
regional and privately established and
capitalized national pools.
H.R. 579
Earthquake, Volcanic
Same as H.R. 481 in 106th Congress.
(Mink)
Eruption, and
Hurricane Hazards
Insurance Act of 1997

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CRS-17
H.R. 3728
Disaster Relief
Amends the Robert T. Stafford Disaster Relief
(Obey)
Partnership Act
and Emergency Assistance Act to return
primary responsibility for disaster relief to the
states; establishes a national disaster insurance
program to provide coverage to states against
certain losses and costs arising from disasters.
104th Congress (1995-1996)
H.R. 1731
Earthquake, Volcanic
Same as H.R. 579 in 105th Congress.
(Mink)
Eruption, and
Hurricane Hazards
Insurance Act of 1995
H.R. 1856
Natural Disaster
Amends the Stafford Act to establish a federal
(Emerson)
Protection Act of 1995
disaster mitigation and insurance program.
H.R. 4115
Residential Windstorm
Instructs the Director of FEMA to study the
(Frazer)
Insurance Plan Act of
advisability and feasibility of establishing a
1996
residential windstorm insurance program
designed to provide windstorm insurance to
residential property owners unable to obtain
coverage in the private market.
S. 1043
National Disaster
Amends the Earthquake Hazards Reduction
(Stevens)
Protection and
Act of 1977 by adding new definitions to the
Insurance Act of 1995
existing acts, as well as three interrelated
programs — hazard mitigation, relief, and
insurance and reinsurance — against the risk
of catastrophic natural disaster, such as
hurricanes, earthquakes, volcanic eruptions,
and tsunami.
103rd Congress (1993-1994)
H.R. 62
National Flood
Amends the NFIA to make changes designed
(Bereuter)
Insurance Compliance,
to increase compliance with the mandatory
Mitigation, and Erosion
purchase requirement, to establish ratings and
Management Act of
incentives for community floodplain
1993
management programs, and to mitigate flood
and erosion risks.
H.R. 764
Windstorm Hazard
Directs the Director of FEMA to develop a
(de Lugo)
Reduction Plan Act of
plan for establishing and carrying out a
1993
national windstorm insurance program and to
submit it to specified committees of Congress.
H.R. 935
Earthquake, Volcanic
Same as H.R. 1731 in the 104th Congress.
(Mink)
Eruption, and
Hurricane Hazards
Insurance Act of 1993
H.R. 1302
Hurricane Hazard
Establishes a national hurricane insurance
(Shaw)
Reduction Act of 1993
program that features an excess loss
reinsurance program to provide reinsurance
coverage to private insurers and reinsurers for
hurricane-related losses that would otherwise
be ineligible for coverage.

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CRS-18
H.R. 2873
Natural Disaster
Amends the Robert T. Stafford Act by adding
(Mineta)
Protection Partnership
several new definitions and three new titles
Act of 1994
relating to disaster mitigation, mandatory
purchase of disaster coverage, and the
establishment of the Natural Disaster
Protection Fund, with three accounts to
provide: (1) direct loans to insurers and state
insurance pools; (2) grants to eligible states for
the repair of facilities and infrastructure; and
(3) funds for hazard mitigation activities of the
states.
H.R. 3185
Flood Insurance
Amends the NFIA to make changes to the
(Talent)
Reform and Relief Act
NFIP in the area of structural elevation
of 1993
requirements.
H.R. 3191
National Flood
Amends the NFIA to make changes designed
(Kennedy)
Insurance Reform Act
to increase compliance with the mandatory
of 1994
purchase requirement, establish ratings and
incentives for community floodplain
management programs, and mitigate flood and
erosion risks.
S. 1350
Natural Disaster
Amends the Earthquake Hazard Reduction Act
(Inouye)
Protection Act of 1993
of 1977 to authorize FEMA to establish three
interrelated programs focusing on disaster loss
mitigation, expanded insurance protection
against earthquakes, and an excess-loss
reinsurance program for multi-hazards,
including hurricanes, tornadoes, and volcanic
eruptions.
102nd Congress (1991-1992)
H.R. 3021
Presidential Insurance
Establishes a Presidential Commission on
(Rinaldo)
Commission Act of
Insurance.
1991
H.R. 4792
Earthquake and
Same as H.R. 935 in 105th Congress
(Mink)
Volcanic Eruption
Hazard Reduction Act
H.R. 5447
Riot Reinsurance Act
Reauthorizes the program under title XII of the
(Campbell)
of 1992
National Housing Act to provide reinsurance
through FEMA against property losses
resulting from riots or civil disorders.
S. 1276
Presidential Insurance
Same as H.R. 3021.
(Dodd)
Commission Act of
1991
S. 2533
Earthquake and
Same as H.R. 4792.
(Inouye)
Volcanic Eruption
Hazard Reduction Act
101st Congress
H.R. 4480
Federal Earthquake
Creates the Federal Earthquake Insurance and
(Swift)
Insurance and
Reinsurance Corporation to make earthquake
Reinsurance Act of
and volcanic eruption insurance available to
1990
homeowners and business owners.

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CRS-19
H.R. 4462
National Earthquake
Requires the Director of FEMA to identify
(Brown)
Insurance and
earthquake hazards nationwide and make this
Reinsurance Act of
information available to affected communities.
1990
Also authorizes the Director to establish a
national earthquake insurance and reinsurance
program.
H.R. 4915
Earthquake Hazards
Amends the Earthquake Hazards Reduction
(Brown)
Reduction Amendment
Act of 1977 to carry out a newly established
Act of 1990
National Earthquake Insurance Program.
100th — 99th — 98th (1983-1988)
No major federal disaster insurance bills introduced
97th Congress (1981-1982)
H.R. 1369
Federal Disaster
Establishes within the Department of the
(Danielson)
Insurance Act of 1981
Treasury the Federal Disaster Insurance
Corporation to provide every citizen and
resident of the United States who makes an
application and qualifies, with insurance
against damage to or loss of property due to
natural disasters. Repeals the National Flood
Insurance Act of 1968.
96th Congress (1979-1980)
H.R. 1922
Federal Disaster
Same as H.R. 1369 in 97th Congress.
(Danielson)
Insurance Act of 1979
95th Congress (1977-1978)
H.R. 4643
Disaster I nsurance
Establishes a Disaster Insurance Corporation
(St. Germain)
Corporation Act of 1977
to encourage private insurance companies to
provide insurance against catastrophic losses,
and to reinsure such companies against
abnormally high losses resulting form the
provision of such insurance.
94th Congress (1975-1976)
H.R. 1677
National Catastrophic
Establishes within the Office of Federal
(Flood)
Disaster Insurance Act
Insurance Administrator in the Department of
of 1975
Housing and Urban Development a program of
federal insurance against catastrophic natural
disasters utilizing the private insurance
industry, particularly risk-sharing pools of
insurance companies, while preserving state
regulation.
H.R. 8718
Federal Disaster
Same as H.R. 1369 in 97th Congress.
(Danielson)
Insurance Act of 1975
S. 741
National Catastrophic
Establishes a program of federal insurance
(Scott)
Disaster Insurance Act
against catastrophic disasters. Similar to H.R.
of 1975
1677.

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CRS-20
S. 3884
Federal Insurance
Establishes a Federal Insurance Administrator
(Brooke)
Administrator Act
in HUD whose function would be to issue
charters to corporations for carrying out the
business of insurance, particularly as it relates
to floods and federal entities set up to manage
flood hazards under the National Flood
Insurance Act of 1968.
93rd Congress (1973-1974)
H.R. 4772
National Catastrophic
Same as H.R. 1677 in 94th Congress.
(Flood)
Disaster Insurance Act
of 1973
H.R. 4920
Federal Disaster
Creates a Federal Disaster Insurance
H.R. 6317
Insurance Corporation
Corporation to insure against losses due to
H.R. 6317
Act of 1973
major natural disaster.
H.R. 7457
H.R. 8833
(Danielson)
H.R. 6744
Natural Disaster
Authorizes the Secretary of HUD to establish
(Roybal)
Insurance Act of 1973
a program of federal insurance against natural
disasters.
H.R. 6903
Federal Disaster
Establishes a national program of federal
H.R. 6904
Insurance Act of 1973
insurance against catastrophic disasters.
H.R. 6905
(Flood)
H.R. 7433
National Catastrophic
Same as H.R. 4772.
(Rees)
Disaster Insurance Act
of 1973
H.R. 7604
Federal Disaster
Establishes a national program of federal
(Morgan)
Insurance Act of 1973
insurance against catastrophic disasters.

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