Letter Opposing H.R. 1264, the "Multiple Peril Insurance Act"
TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:
The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly opposes H.R. 1264, the “Multiple Peril Insurance Act,” which would add wind related damages to the National Flood Insurance Program.
The Gulf Coast states collectively insure approximately $20 trillion in private property. These properties are largely insured by private enterprises and are regulated by the states. Moving thousands of such policies out of the marketplace and into the NFIP would be a dramatic increase in exposure to the taxpayer and invites additional taxpayer subsidy of the program despite calls for “actuarially sound rates” for the proposed wind damage expansion.
The Government Accountability Office reported that Federal Emergency Management Agency could be compelled to borrow additional funds from the Treasury, as it did for Hurricanes Katrina and Rita, but now with even greater potential liability. It should be noted that the program is already $18 billion in debt without any proposed expansion.
Administration officials have already stated that transferring an enormous amount of properly-insured risk out of the private sector and absorbing it into the NFIP, and ultimately the taxpayer, is not the appropriate solution to the challenges presented by catastrophic natural disasters.
The Chamber urges you to oppose H.R. 1264 because it would create a massive new federal program that would displace market forces for little to no benefit to the taxpayer or the insured. The Chamber may consider votes on, or in relation to, this issue in our annual How They Voted scorecard.
R. Bruce Josten