WASHINGTON - Arkansan James Lee Witt, a disaster-response expert and former head of the Federal Emergency Management Agency, pushed Tuesday for the creation of a privately funded catastrophic-disaster insurance fund.
Witt, who served as the nation’s top disaster response official under President Bill Clinton and now is chairman of the board of Witt-O’Brien’s, a crisis-management firm, said that under the current system, taxpayers are left with an expensive bill every time a hurricane or earthquake hits.
“Why do we keep waiting for the next one?” he asked.
Witt was joined by a panel of insurance and disaster experts who supported a bill called the Homeowners and Taxpayers Property Protection Act of 2013 that was authored by U.S. Rep. Albio Sires, D-N.J., whose district was slammed by super storm Sandy last fall.
The bill would divert homeowners’ insurance premiums from state-regulated insurance plans and pool them to create a national insurance fund. Instead of using congressionally appropriated emergency funds to pay for damage when a disaster strikes, payments would be made out of the national fund.
Proponents of the bill have said the creation of a national fund will lower insurance premiums and spread risks more widely.
Critics, who have called the plan a “beach house bailout,” contend that the legislation would promote home construction in disaster-prone areas and lower insurance premiums, which would mask actual risk that homeowners face.
“Those are two totally contrary goals, said R.J. Lehmann, a spokesman for R Street Institute, a conservative research group in Washington. “We shouldn’t encourage development in areas that are high risk.”
The R Street Institute is part of Smarter Safer, a coalition of insurance companies, environmental groups and taxpayer advocates who oppose the legislation.
At the discretion of the treasury secretary, about 35 percent of the fund would be given to participating states to be used for disaster-preparedness education and mitigation.
Witt-O’Brien’s website says the company provides a full slate of disaster preparedness services, including emergency management planning, mitigation training and regulatory compliance.
Witt said his company did not stand to benefit from the portion of the fund that would be granted to states for education and mitigation.
“Not me,” Witt said. “That’s local, not me.
“Any time you have a local government that has a mitigation project, whether it’s hurricane shutters or storm drain systems, that’s all done locally. We go in and help them in the recovery after the disaster, not this,” he said.
Front Section, Pages 8 on 03/13/2013