IV

103D CONGRESS

2D SESSION H. CON. RES. 267

Expressing the sense of the Congress that the Federal Government should

develop a comprehensive program regarding natural disasters, require

individuals and businesses in disaster prone areas to purchase insurance

for natural disasters, and create a Federal reinsurance program to minimize the associated risks to insurance companies.

IN THE HOUSE OF REPRESENTATIVES

JULY 19, 1994

Mr. BURTON of Indiana submitted the following concurrent resolution; which

was referred to the Committee on Banking, Finance and Urban Affairs

CONCURRENT RESOLUTION

Expressing the sense of the Congress that the Federal Government should develop a comprehensive program regarding natural disasters, require individuals and businesses

in disaster prone areas to purchase insurance for natural

disasters, and create a Federal reinsurance program to

minimize the associated risks to insurance companies.

Whereas the earthquakes in California on January 17, 1994,

caused approximately $20,000,000,000 in damages and

cost 61 people their lives;

Whereas the Federal Government is expected to provide

$7,700,000,000 in assistance to the victims of the California earthquakes;
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•HCON 267 IH

Whereas the average American taxpayer has paid $53 to assist the victims of Hurricane Andrew and $39 to assist

the victims of Midwestern floods;

Whereas, in the past 5 years, the Congress has spent

$23,600,000,000 on relief related to natural disasters;

Whereas only 20 percent of the individuals residing in California or the Midwest have adequate insurance coverage

for natural disasters;

Whereas fewer than 1 of every 5 of the 110,000,000 Americans who are at risk of damage from earthquakes, hurricanes, or floods buys private insurance for these natural

disasters;

Whereas many individuals who are not insured for natural

disasters have not purchased the insurance because of its

high price;

Whereas requiring more individuals and businesses in disaster prone areas to purchase insurance would cause the

cost of insurance to decrease and would allow more individuals and businesses to obtain affordable insurance for

natural disasters;

Whereas insurance companies are reluctant to provide insurance to individuals and businesses in many areas that

have previously suffered natural disasters;

Whereas the establishment of a Federal reinsurance program

would allow companies to provide insurance coverage for

natural disasters to individuals and businesses in these

areas;

Whereas a Federal reinsurance program would minimize the

financial risk to insurance companies that provide insurance coverage for natural disasters to individuals and

businesses in these areas;
3

•HCON 267 IH

Whereas a Federal reinsurance program would greatly reduce

the total costs the Federal Government must bear for

natural disaster relief and the use of Federal tax dollars

for natural disaster relief; and

Whereas the Congress has failed to develop a comprehensive

solution to problems concerning insurance for natural

disasters: Now, therefore, be it

1 Resolved by the House of Representatives (the Senate

2 concurring), That it is the sense of the Congress that the

3 Federal Government should—

4 (1) with assistance from State and local offi5 cials, develop and implement a comprehensive pro6 gram to prevent further exorbitant spending on as7 sistance relating to natural disasters;

8 (2) require individuals and businesses in areas

9 that have a high risk of experiencing natural disas10 ters to purchase comprehensive insurance to cover

11 the high cost of damages resulting from natural dis12 asters such as flooding, earthquakes, and hurricanes;

13 and

14 (3) create a Federal reinsurance program that

15 would minimize the financial risk incurred by insur16 ance companies that provide insurance in areas that

17 have a high risk of experiencing natural disasters.

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