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Congress should build on catastrophe bills


FLORIDA'S TWO SENATORS deserve thanks for their legislative package, unveiled last week, addressing the growing exposure of natural catastrophes.

We say that even though that we don't agree with everything that Sens. Bill Nelson, D-Fla., and Mel Martinez, R-Fla., have included in their proposals.

For one, we're still skeptical about the need for government to get directly involved in catastrophe funds--there's always the temptation to view rates and conditions with more of a political eye than an actuarial one. But, that said, we understand why the senators would choose to address that issue.

Their ideas concerning encouraging mitigation and exploring the use of the tax codes to allow insurers to build up precatastrophe reserves strike us as worthwhile.

Reforming the regulation of reinsurers and surplus lines insurers also makes sense, although we hope that any Senate bill that emerges--whether as part of a catastrophe-response package or as a stand-alone measure--will reflect changes made by House sponsors this year to liberalize the definition of a "qualified risk manager" able to take advantage of some of the bill's provisions.

Florida's senators have no illusions that their bills will all be enacted, but hope instead that their efforts will lead to national debate and consensus over how best to meet the challenge of protecting businesses and homes alike from catastrophic losses, both through mitigation and insurance.

We can only wish them well in that effort.