HOUSE BILL REPORT

SJM 8025

BYSenators von Reichbauer, Moore, Sutherland, Fleming and Gaspard

Petitioning Congress to support the earthquake project.

House Committe on Financial Institutions & Insurance

Majority Report:  Do pass.  (14)

      Signed by Representatives Dellwo, Chair; Zellinsky, Vice Chair; Chandler, Ranking Republican Member; Baugher, Beck, Crane, Day, Dorn, Inslee, P. King, Nutley, Schmidt, K. Wilson and Winsley.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE FEBRUARY 27, 1990

BACKGROUND:

Recent evidence suggests that Washington State's geological composition is capable of producing major seismic activity.  In addition, the potential for a catastrophic earthquake in the United States has raised nationwide concern about the financial impact of such an occurrence.

Congress is considering a proposal that would establish a funding mechanism to provide financial relief in the event of a catastrophic earthquake. The proposal, entitled the Federal Earthquake Insurance and Reinsurance Act or "The Earthquake Project," creates a two-tiered system to provide earthquake coverage to homeowners and reinsurance for earthquake insurance companies. Earthquake insurance premiums could be reduced between one-half to one-third because of the risk spreading requirements of the proposal.

SUMMARY:

The Washington State Legislature recognizes the previous seismic activity in Washington, the potential for continued activity in the future, and the serious financial impact accompanying an earthquake. The Legislature expresses its support for congressional endorsement of The Earthquake Project.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Jean Leonard, State Farm Insurance and Washington Insurers.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    Passage of this measure will encourage Congress to pursue a project that will make earthquake insurance more available and affordable.

House Committee - Testimony Against:      None.