Senate Proceeding on Apr 27th, 2009 :: 0:46:40 to 0:54:50
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0:46:36 to 0:46:57( Edit History Discussion )

Bill Nelson: i thank the chair and would yield the floor. the presiding of senator from florida. a senator: mr. president, it is my intent to just take a very few minutes. we are speaking as if business? thank you, mr. president.

0:46:40 to 0:54:50( Edit History Discussion )
Speech By: Bill Nelson

0:46:58 to 0:47:18( Edit History Discussion )

Bill Nelson: mr. nelson: mr. president what do florida, louisiana, texas, and california all have in common? and sunbelt states, each of these states is subject to the a natural catastrophe event.

0:47:19 to 0:47:44( Edit History Discussion )

Bill Nelson: we've certainly seen that in the case of hurricanes in florida and louisiana and texas and we know of it with the north ridge earthquake in the case of california. each of these states their homeowners insurance in a diff

0:47:48 to 0:48:11( Edit History Discussion )

Bill Nelson: but increasingly states are quasi-government reinsurance company is set up in the case of florida it is the florida hurricane catastrophe fund that, in effect, reinsures private insurance companies in induce them to continue to sell insurance in the marketplace.

0:48:12 to 0:48:32( Edit History Discussion )

Bill Nelson: and so the insuran instead of going out on to the world markets getting reinsurance, that is, insurance against instead or in addition to go to a creature in florida's case

0:48:33 to 0:48:53( Edit History Discussion )

Bill Nelson: called the florida hurricane catastrophe fund. the problem is that each of our states, florida and texas and califoia, and louisiana, that are each facing this potential mega catastrophe event,

0:48:54 to 0:49:14( Edit History Discussion )

Bill Nelson: hurricane or earthquake, find it increasingly difficult reinsurance at an affordable rate. and indeed some of the reinsurance that provided for even if you go out

0:49:15 to 0:49:38( Edit History Discussion )

Bill Nelson: and try to prearrange a bond issue given the fact of these markets now that are very uncertain about being obtained -- about being able to obtain a causing a great deal of turmoil for a state to know that it can

0:49:39 to 0:50:03( Edit History Discussion )

Bill Nelson: cover the losses if the major catastrophe hits. and so what i have introduced today and i will be the senators from texas, california, and louisiana, and will ultimately the senators from the states on the atlantic seaboard and the

0:50:04 to 0:50:25( Edit History Discussion )

Bill Nelson: gulf coast as well as other earthquake-prone areas such as memphis, tennessee, which has one of the major faultlines in the country running through it and would be a potential major catastrophe because of all of the gas lines that run from the texas and oklahoma well fields all the way to new york and to new england.

0:50:26 to 0:50:46( Edit History Discussion )

Bill Nelson: it would be a major catastrophe if an earthquake hits, and that's one of the fault lines. so what this legislation will do will provide a backup for the state catastrophe allowing them to have the

0:50:47 to 0:51:09( Edit History Discussion )

Bill Nelson: assurance that when they go into bonds to pay off claims after the disaster has hit, that they'll be able, even in these uncertain times

0:51:10 to 0:51:31( Edit History Discussion )

Bill Nelson: marke bond issues because it will have a united states government guarantee. now, you might would we want the federal government to guarantee those? well, clearly it's in interest of the federal government because these are

0:51:32 to 0:51:54( Edit History Discussion )

Bill Nelson: only going to be guaranteeing public organization that are an -- that are an arm and are run by members of a board that, indeed, are public officials. and it will actually end up saving federal tax dollars.

0:51:55 to 0:52:17( Edit History Discussion )

Bill Nelson: now, you say: w if the federal government is going to guarantee a bond issue, that has a certain cost to it. it does, but this is how it saves the federal government money: because at the end of the day when strikesuess who's going to pay for it? it's going to be the federal government.

0:52:18 to 0:52:39( Edit History Discussion )

Bill Nelson: so if payments have already been provided by private insurance because we have enabled that through this reinsurance fund, then that means that that is additional costs that the federal

0:52:40 to 0:53:02( Edit History Discussion )

Bill Nelson: government will not have to bear. i remind the senate that when katrina struck new orleans that total tab is somewhere in the neighborhood of $200 billion. an share of that is well north of $100 billion or over half of

0:53:03 to 0:53:25( Edit History Discussion )

Bill Nelson: the total costs. when the category 4 or category 5 hurricane hits an urbanized part of the coast, be it in any one of our states, it is clearly going to be a major economic loss government is going to come in.

0:53:26 to 0:53:46( Edit History Discussion )

Bill Nelson: if a lot of those damages have already been paid by private insurance enabled by these reinsurance funds setup by state governments enabled because they have a federal guarantee on the loans, then it ends up being a win-win situation.

0:53:47 to 0:54:10( Edit History Discussion )

Bill Nelson: and because my colleague from tennessee is add that, of course, ka tass physica--catastrophes are not just hurricanes, but some of the worst catastrophes that could

0:54:11 to 0:54:31( Edit History Discussion )

Bill Nelson: happen are, in fact, earthquakes. an of the area such as san francisco or memphis, tennessee, would be of insurance losses, well in

0:54:32 to 0:54:52( Edit History Discussion )

Bill Nelson: excess of between $50 billion and $100 billion. this is a rational way through the private sector marketplace to approach that problem. and i commend to the senate this bill that i file today, the catastrophe obligation guarantee