Democrats Latest Bailout Iteration
While requests for billions from the federal government, and the nation’s taxpayers, have become agonizingly commonplace, Rep. Klein’s proposed bill H.R. 2555, the Homeowners' Defense Act, is notably reprehensible.
ATR’s letter to the Hill which urged Members to oppose H.R. 2555 explains the problem:
Florida’s private home insurance and reinsurance companies charged high premiums to cover the immense costs they would incur were a hurricane to hit the coast of Florida. Arguing that the premiums charged by private companies were unfair and discouraged development, state officials created a public homeowners insurance company, the Florida Citizens Property Insurance Corporation (Citizens) and a government controlled-reinsurer, the Florida Hurricane Catastrophe Fund. Both charged a fraction of realistic actuarial rates. Today, about 20 percent of Floridians purchase insurance through Citizens and almost all private insurers face a mandate to buy into the Cat Fund
Today, neither entity has enough money to cover its customer’s claims were a hurricane to hit the coast of Florida. The Cat Fund has $4.5 billion in hard assets to cover liabilities that could top $25 billion in a bad storm season. In light of this problem, Representative Ron Klein of Florida introduced HR. 2555 which proposes the federal government, and by extension taxpayers nationwide, cover Citizens and Cat Fund liabilities in the event of a disaster.
Rep. Klein’s remedy for a problem that Florida’s state government created is…more government. How unimaginative. Instead of fixing Florida’s broken insurance system, HR 2555 only prolongs necessary reform by infusing the state with taxpayer’s dollars. This is neither equitable nor prudent.
Speaking about Rep. Klein’s legislation in a recent press release, Grover Norquist, President of Americans for Tax Reform, said:
“Rep. Klein wants force taxpayers in all 50 states to pay for his failed Florida plan thus saving the wealthy beachfront property owners in case of a natural disaster. The Democrats are continuing as the party of bailouts and this one ranks close to the top in terms of stupidity.”