FINAL BILL REPORT

SJM 8025

BYSenators von Reichbauer, Moore and Sutherland

Petitioning Congress to support the earthquake project.

Senate Committee on Financial Institutions & Insurance

House Committe on Financial Institutions & Insurance

AS PASSED LEGISLATURE

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 and the ability of the impacted region to rebuild.

Congress is considering a proposal that would establish a prefunding mechanism to set aside funding for 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 primary coverage to homeowners and reinsurance in the event of a catastrophic event.  It is projected that earthquake insurance premiums would be reduced between one-half to one-third because of the risk spreading requirements contained within the proposal.

SUMMARY:

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

VOTES ON FINAL PASSAGE:

     Senate   47    0

     House 94  0