Sec. 2. Findings and purposes
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The Congress finds that— the United States has a history of catastrophic natural disasters, including hurricanes, tornadoes, flood, fire, earthquakes, and volcanic eruptions; although catastrophic natural disasters occur infrequently, they will continue to occur and are predictable; such disasters generate large economic losses and a major component of those losses comes from damage and destruction to homes; for the majority of Americans, their investment in their home represents their single biggest asset and the protection of that investment is paramount to economic and social stability; the United States needs to take and support State actions to be better prepared for and better protected from catastrophes; as the risk of catastrophic losses grows, so do the risks that any premiums collected by private insurers for extending coverage will be insufficient to cover future catastrophes, and private insurers, in an effort to protect their shareholders and policyholders (in the case of mutually owned companies), have thus significantly raised premiums and curtailed insurance coverage in States exposed to major catastrophes; such effects on the insurance industry have been harmful to economic activity in States exposed to major catastrophes and have placed significant burdens on residents of such States;
Hurricanes Katrina, Rita, and Wilma struck the United States in 2005, causing over $200,000,000,000 in total economic losses, and insured losses to homeowners in excess of $50,000,000,000; while the total costs of Hurricane Sandy have not yet been calculated, Fitch Ratings, a global credit ratings agency, has estimated that insured losses will amount to between $20,000,000,000 and $25,000,000,000; the Federal Government has provided and will continue to provide resources to pay for losses from future catastrophes; and it is the proper role of the Federal Government to prepare for and protect its citizens from catastrophes and to facilitate consumer protection, victim assistance, and recovery, including financial recovery.
The purpose of this Act is to establish a national catastrophic risk consortium to ensure the availability and affordability of homeowners’ insurance coverage for catastrophic events.