WASHINGTON - Florida lawmakers have introduced a number of federal bills aimed at addressing high insurance costs, but they acknowledge it may take another Katrina-like disaster to trigger a governmental solution.
Responding to the multiple-hurricane seasons of 2004 and 2005, property/casualty insurers have reduced their exposure in Florida by writing fewer policies, jacking up premiums, or pulling out of the state altogether.
Members of Florida's congressional delegation said the situation is becoming dire, with businesses and homeowners struggling to find affordable property insurance.
Rep. Tom Feeney, R-Fla., said at a House Financial Services subcommittee hearing in Washington last week that the lack of affordable coverage could force businesses to leave the state.
"If that happens in Florida, … we will have not a recession, but a depression," he said.
Rep. Mark Foley, R-Fla., said at the same hearing that in his home state, he is seeing "a sense of urgency that I have not witnessed in my entire life."
Bankers say they are also eager for legislative action, arguing that they cannot make loans on property for which borrowers have no insurance. Last week the Florida Bankers Association brought together bankers, insurance agents, home builders, real estate agents, regulators, and government officials for a summit in Tampa to discuss possible solutions.
Alex Sanchez, the trade group's president and chief executive, said that about 50 bankers attended, and that the meeting generated broad-based support for disaster-mitigation measures, such as tougher building codes.
On Capitol Hill, Florida lawmakers are pushing bills that they say would provide stability to insurers, but so far they have failed to sway their colleagues from states where natural disasters occur less frequently.
"We might have to strike while the iron is hot," Rep. Feeney said in an interview. "It might take another natural disaster and severe property loss to make this a priority."
Rep. Debbie Wasserman Schultz, D-Fla., said that because representatives from noncoastal states "don't view themselves as being in the direct-hit area, they view this as something they don't need to be responsible for."
That sentiment was apparent at the hearing, which drew only one representative from a noncoastal state. Reps. Clay Shaw and Ginny Brown-Waite, both Republicans from Florida, have introduced a bill that would establish a national catastrophic reinsurance fund. Rep. Wasserman Schultz has sponsored legislation to create a commission to examine how such a fund could function most effectively.
Rep. Foley has introduced a bill that would allow insurance companies to build reserves on a tax-deferred basis; the reserves could then be used to cover losses from natural disasters. And Rep. Feeney sponsored a bill that would create catastrophe savings accounts, allowing consumers to set aside funds that could be used to repair damaged property.
Florida lawmakers are not alone in trying to drum up congressional support. ProtectingAmerica.org, a coalition of insurers, builders, law enforcement groups, nonprofits, and others, recently took out full-page advertisements in The New York Times, The Wall Street Journal, and The Washington Post as part of a campaign to support the Brown-Waite bill.
The lack of affordable insurance is also an issue in other coastal states. Peter Gwaltney, the president of the Louisiana Bankers Association, called Congress' inaction "somewhere between risk management and gambling."
If there were no natural disasters, the inaction would be "perceived as fiscal responsibility, but if there is another event like Katrina, then Congress will likely end up spending more than they would have with a well thought-out plan," Mr. Gwaltney said.
"By waiting, you're just sticking your head in the sand and hoping that it won't happen again."
