I
103D CONGRESS
1ST SESSION
H. R. 764
To require the Director of the Federal Emergency Management Agency to
develop a plan and submit a report to the Congress regarding establishing
a national windstorm insurance program.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 3, 1993
Mr. DE LUGO (for himself and Mr. APPLEGATE) introduced the following bill;
which was referred jointly to the Committees on Public Works and Trans-
portation and Banking, Finance and Urban Affairs
A BILL
To require the Director of the Federal Emergency Manage-
ment Agency to develop a plan and submit a report
to the Congress regarding establishing a national wind-
storm insurance program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Windstorm Hazard
Reduction Plan Act of 1993’’.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that—
(1) in 1992, the property and casualty insur-
ance industry suffered more losses caused by natural
disasters than in any other year;
(2) a substantial portion of the losses were
caused by windstorms, such as hurricanes and tor-
nadoes; and
(3) because of the windstorms in 1992 and re-
cent years, in certain regions of the United States
and the territories of the United States, including
the Virgin Islands, property and casualty insurers
are withdrawing underwriting capacity from the
market by refusing to issue new policies or renew ex-
isting policies, or by increasing premiums to
unaffordable levels.
SEC. 3. DEVELOPMENT OF INSURANCE PLAN.
(a) IN GENERAL.—Not later than the expiration of
the 90-day period beginning on the date of the enactment
of this Act, the Director of the Federal Emergency Man-
agement Agency (in this Act referred to as the ‘‘Director’’)
shall develop a detailed written plan under this Act for
establishing and carrying out a national windstorm insur-
ance program.
(b) CONTENTS.—The plan required under subsection
(a) shall be designed—
(1) to supplement Federal disaster relief and
emergency assistance provided pursuant to the Rob-
ert T. Stafford Disaster Relief and Emergency As-
sistance Act and other laws for damage and loss
caused by winds from hurricanes, tornadoes, and
other windstorms;
(2) to make affordable insurance coverage avail-
able to protect against loss resulting from physical
damage to, or loss of, residential structures arising
from wind damage;
(3) to provide such insurance coverage for resi-
dential structures through a program that pro-
vides—
(A) insurance coverage for damage caused
by winds from hurricanes, tornadoes, and any
other windstorms, but not for water damage
arising from any such windstorms;
(B) insurance coverage at premium rates
affordable to homeowners in areas at risk of
such wind damage;
(C) appropriate building and structural re-
quirements and other wind damage-mitigation
measures;
(D) appropriate measures to carry out
mitigation efforts; and
(E) schedules of the amount of coverage
available for various residential structures;
(4) to provide incentives for private property
and casualty insurers to reenter markets from which
they have previously withdrawn; and
(5) to make insurance coverage available, if the
Director determines that such coverage would be
feasible, for other types or classes of properties in-
cluding—
(A) public infrastructure facilities and
properties owned by State and local govern-
ments, which may include airports, roads,
bridges, dams, sewer systems, governmental
buildings, and other facilities and structures;
(B) other residential properties;
(C) business properties;
(D) agricultural properties; and
(E) properties owned by private nonprofit
organizations.
(c) CONSIDERATIONS.—The national windstorm in-
surance program contained in the plan required under
subsection (a) may—
(1) provide for participation of the private in-
surance industry in carrying out the program;
(2) provide coinsurance by the Director and pri-
vate insurers for covered losses and reinsurance for
losses sustained by private insurers;
(3) define—
(A) the areas in which such coverage is
made available by establishing requirements for
the eligibility or participation of communities or
by other means;
(B) the types of residential properties,
business properties, agricultural properties,
properties owned by private nonprofit organiza-
tions, and public infrastructure facilities and
properties owned by State and local govern-
ments, for which such coverage is made avail-
able; and
(C) the availability or coverage of such in-
surance in any other manner;
(4) establish premium rates for coverage that
are actuarially based on the risk of wind-caused
damage or subsidized premium rates that are less
than such actuarially based rates;
(5) adjust the availability of Federal loan guar-
antees, loan insurance, or direct loans, or Federal
construction or disaster relief assistance (under the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act and other laws), based on the pur-
chase of a policy for windstorm insurance; and
(6) provide community-based and other incen-
tives for participation in the program.
(d) CONSULTATION.—In developing the plan required
under subsection (a), the Director shall consult with—
(1) the heads of any Federal agencies author-
ized to provide disaster relief;
(2) the chief executive officers of the States and
territories of the United States, that suffered signifi-
cant losses caused by windstorms occurring after the
beginning of 1989; and
(3) representatives of private insurers that are
withdrawing underwriting capacity from the markets
in the States and territories referred to in paragraph
(2).
SEC. 4. REPORT.
Not later than the expiration of the 90-day period
beginning on the date of the enactment of this Act, the
Director shall submit to the Committee on Public Works
and Transportation and the Committee on Banking, Fi-
nance and Urban Affairs, of the House of Representatives,
and to the Committee on Environment and Public Works
and the Committee on Banking, Housing, and Urban
Affairs, of the Senate, a report containing—
(1) the written plan required under section 3;
(2) a statement of the amount of disaster as-
sistance provided pursuant to the Robert T. Stafford
Disaster Relief and Emergency Assistance Act and
other Acts during each of fiscal years 1989, 1990,
1991, and 1992 for property damage caused by
winds from hurricanes, tornadoes, and other wind-
storms to residential properties, business properties,
agricultural properties, properties owned by private
nonprofit organizations, and public infrastructure
facilities and properties owned by State and local
governments;
(3) an estimate of the cost to the Federal Gov-
ernment of carrying out the national windstorm in-
surance program under the plan, by making cov-
erage available only for residential structures;
(4) a description of any circumstances or situa-
tions that, in the determination of the Director,
would be a sufficient basis for making coverage
available under the national windstorm insurance
program for public infrastructure facilities and prop-
erties owned by State and local governments, other
residential properties, business properties, agricul-
tural properties, and properties owned by private
nonprofit organizations.
(5) an estimate of the cost to the Federal Gov-
ernment of carrying out the national windstorm in-
surance program under the plan, by making cov-
erage available for residential structures and for
public infrastructure and properties owned by State
and local governments, other residential properties,
business properties, agricultural properties, and
properties owned by private nonprofit organizations.
(6) an estimate of the effects that implementing
the national windstorm insurance program would
have on the amount of disaster assistance provided
by the Federal Government;
(7) an estimate of the effects that implementing
the national windstorm insurance program would
have on the private insurance industry and the avail-
ability of residential and other property insurance
and insurance against windstorm damage;
(8) a description of any amendments to the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act and other Acts relating to disaster
assistance that would be necessary or appropriate in
the event of the implementation of the national
windstorm insurance program; and
(9) any other information that the Director
considers appropriate.