RAA Urges Senate to Support Private Market and Disaster Resilience

In testimony submitted to the US Senate Committee on Banking, Housing, and Urban Affairs, the Reinsurance Association of America (RAA) called for policy measures aimed at strengthening private insurance markets and enhancing disaster resilience. The comments were part of a hearing titled "Examining Insurance Markets and the Role of Mitigation Policies." 

Franklin Nutter, president of the RAA, addressed Committee Chairman Senator Tim Scott and Ranking Member Senator Elizabeth Warren in a formal letter that emphasized the need to avoid expanding government-run insurance programs. "Rising insurance costs are driven by escalating natural hazards, inflation, and lawsuit abuse—not a failure of private markets," Mr. Nutter said. "Rather than expand government insurance programs, we must build a smarter, resilient, and risk-aware system." 

The RAA presented five recommendations.

First, it urged Congress to preserve state regulatory authority, arguing that local jurisdictions are best suited to handle region-specific risks such as wildfires, floods, and hurricanes. States like Florida and California were cited as examples of ongoing reform efforts aimed at market stabilization. 

Second, the group advocated for policies promoting resilient construction and mitigation. Citing federal data showing a $13 return for every $1 spent on mitigation, the RAA backed Senator Scott's "Repeatedly Flooded Communities Preparation Act" and proposed reforms to the National Flood Insurance Program (NFIP) to encourage more private market involvement. 

Third, the RAA called for full implementation of the Community Disaster Resilience Zones Act, including prioritization of high-risk communities and improvements to weather and risk data from agencies such as the National Oceanic and Atmospheric Administration, the National Aeronautics and Space Administration, and the United States Geological Survey. 

Fourth, it supported initiatives to unlock private capital for resilience. The RAA endorsed bipartisan efforts like Senator Thom Tillis's Disaster Mitigation and Tax Parity Act, which seeks to remove tax barriers to predisaster mitigation and encourage investment through tax credits and public-private financing tools. 

Finally, the association focused on addressing the insurance protection gap. With fewer than 6 percent of US homeowners insured against flood, it pushed for the development of new products and partnerships to reduce taxpayer exposure to uninsured disaster losses. 

The RAA also warned against the creation of new federal insurance or reinsurance programs, referencing the NFIP's accumulated debt of over $22 billion. "Expanding federal insurance would repeat past mistakes," Mr. Nutter said.