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119-hr-6274119th CongressWALLET

Natural Disaster Risk Reinsurance Program Act

Sponsored By: Representative Moskowitz, Jared [D-FL-23]

Introduced

Summary

Would create a Natural Disaster Risk Reinsurance Program administered by the Treasury to _protect insurers from insolvency after major disasters_. The program targets covered events on or after January 1, 2026 and aims to keep private coverage affordable in state insurance markets.

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  • States: Participation is voluntary and requires a Secretary‑approved state plan. States must pledge their full faith and credit to repay Federal payments within 10 years and give at least 180 days notice to stop participating.
  • Insurers and policyholders: The Treasury would pay each participating State the amount by which industry insured losses exceed that State's trigger amount. Payments arrive in roughly 25 percent installments based on estimated losses and apply to policies renewed after a State begins participation.
  • Program mechanics and federal backing: The National Academy of Sciences sets and reviews State trigger amounts at least every 24 months to reflect roughly a 2 percent annual‑chance severity. The Treasury may issue bonds fully guaranteed by the United States to fund payments, and States must repay with interest so deposits go back to the Treasury general fund.

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 4 benefits, 0 costs, 1 mixed.

Federal backstop for home disaster insurance

If enacted, Treasury would run a new disaster reinsurance program for home policies. It would apply to events on or after January 1, 2026. The Secretary would certify each event, such as hurricanes, earthquakes, fires, and tornadoes. Floods covered by the federal flood program would be excluded. Covered insurance would include homeowners, condo, co-op, and residential rental policies, not mortgage or title insurance. For a certified event, Treasury would pay a participating State for insured losses above the State trigger, in about 25% installments. Triggers would be set per State and event as the smaller of total premiums or a 2%‑chance insolvency level, reviewed at least every 24 months with 180 days’ notice.

Treasury bonds to fund disaster payments

Treasury could issue U.S.-guaranteed bonds to raise cash for disaster payments. Bonds would pay no less than recent market yields for similar U.S. debt. Total bond amounts could cover payments and some administrative costs. Interest on these bonds would not be taxed by state or local governments.

States can opt in, must repay

States could choose to join or leave, with at least 180 days’ notice to leave. To join, a State would need a plan to make insurers pay up to the trigger and share data. The plan must pledge the State’s full faith and credit to repay any federal payment within 10 years, plus interest. Federal funds would be shared among insurers based on losses and market share. Policies in force at the start would not change; the rules would apply at renewal.

More insurer oversight and rate data

Treasury would compile insurers’ annual premium rates for home policies. If needed, insurers would send rate data to the national association of state insurance regulators, which must share it. Treasury could audit disaster claims it helped fund, write rules, and hire staff.

Money to run the new program

The bill would let Treasury spend the sums needed to run the program. No specific dollar amount is set.

Sponsors & CoSponsors

Sponsor

Moskowitz, Jared [D-FL-23]

FL • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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