Kathy Castor: “This amendment commissions a GAO study to examine the effect of the new multi-peril coverage option which is established…”

“This amendment commissions a GAO study to examine the effect of the new multi-peril coverage option which is established as an option in this bill on State insurers and catastrophe funds like those in my State of Florida. This amendment works very well with the initiative of Chairman Frank and my colleague from Florida, Ms. Brown-Waite, and their very thoughtful initiatives. But it builds upon it. And the particular problem in my State of Florida is that the State insurance company, Citizens, now holds 1.3 million policies. Citizens is supposed to be an insurer of last resort; but because private insurance companies have left the State, they've withdrawn from the market, Citizens has ballooned to over 40 percent of the property wind insurance market. Citizens, however, does not have the reserves, the sufficient financial reserves, we believe, to pay the level of claims that would result from a catastrophic hurricane. In the event of a serious storm, Citizens may be forced to turn to public funds again. The new multi-peril option, I know it's in dispute now, but however you feel about it, we need to get to the bottom of the effect it will have on our State insurers and catastrophic funds. It could offer new fiscally sound choices for those in high-risk areas. It has the potential to help address wind insurance availability so that the public is not on the hook for claims when the next storm hits.”