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Florida Coalition for Preservation and National Wildlife Federation Join to Oppose Bill Creating National Insurance Risk Fund

Posted on: Tuesday, 25 September 2007, 12:00 CDT

The National Wildlife Federation joined the Florida Coalition for Preservation today in expressing serious concern over current language in H.R. 3355, known as the Homeowners' Defense Act of 2007, which would create a national catastrophe risk consortium to pool states' disaster insurance risk.

"We are concerned that H.R. 3355's subsidies could inadvertently result in continued encouragement of risky development in our nation's coastal areas and floodplains," the groups said in the letter signed by David Conrad, Senior Water Resources Analyst for the National Wildlife Federation, and former Congressman Tom Evans, chairman of the Florida Coalition of Preservation, a group opposed to runaway overdevelopment in at-risk coastal areas.

"With more development in these environmentally-sensitive areas, the bill could lead to more loss of life, of property, and of wildlife habitat. The safety of our citizens should be the number one priority of any government program dealing with natural disasters. Unfortunately, H.R. 3355 falls short of this goal."

The letter to Reps. Barney Frank and Spencer Baucus, the Chair and Ranking Member of the House Committee on Financial Services, echoes many of the concerns expressed by former Congressman Evans during his Sept. 6 testimony before the Committee. Foremost among those concerns is the bill's failure to require any meaningful hazard mitigation reforms for states wishing to participate in the insurance consortium.

"Hazard mitigation must be a primary goal of any federal backstop for state insurance and reinsurance programs," Conrad and Evans said. "Effective hazard mitigation will save lives, reduce damage, limit federal taxpayers burdens, and will help reduce the cost of insurance."

Of further concern, low-interest loans authorized by the bill would provide added incentive for increased risky development in hazard-prone, ecologically sensitive coastal areas and floodplains. The lack of ceiling amounts for these loans -- which are well below market rates and last at least five to 10 years in duration -- could make taxpayers' liability limitless, and could perversely encourage further risky development in coastal areas, the letter said.

Moreover, Conrad and Evans argued the bill's continued subsidies for risky development in ecologically sensitive areas would jeopardize citizen safety and unnecessarily burden taxpayers. Referencing the National Flood Insurance Program, whose flood-related risk and costs have grown exponentially, they warned such limitless insurance guarantees could lead to the imprudent leveraging of taxpayer dollars to support risky development. The authors thus urged the House Committee on Financial Services not to rush to judgment on this complex bill.

"Safety is of paramount importance to our organizations, and we cannot support legislation that does not consider meaningful hazard mitigation," Conrad and Evans said. "Nor can we support public subsidies in this legislation that, in turn, could further result in additional loss of human life, property, and wildlife habitat in the nation's most ecologically-sensitive coastal areas and floodplains. We stand ready to work with you to address these concerns."

The National Wildlife Federation is America's conservation organization inspiring Americans to protect wildlife for our children's future. For more information, visit www.nwf.org.

The Florida Coalition for Preservation is a not-for-profit organization committed to raising awareness of the environmental and quality-of-life problems resulting from uncontrolled development of Florida's barrier islands.

To learn more about the Florida Coalition for Preservation, please visit www.PreservationFla.org.

Source: Business Wire

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