Federal Reinsurance Program Protects Insurers, Shifts Disaster Costs to States

What it does

This bill establishes a federal reinsurance program administered by the Treasury Department to protect property insurers from insolvency after major natural disasters. When insured losses from a covered disaster (hurricanes, earthquakes, wildfires, etc.) exceed a state-specific threshold, the federal government pays the excess to participating states, which then distribute it to insurers. States must repay these federal payments within 10 years with interest; the federal government borrows money by issuing bonds to fund the payouts. Participation is voluntary for states, and the program applies only to homeowners and residential property insurance, not flood insurance.

Why we flagged it

The bill's operative mechanism is a federal backstop for insurer solvency after catastrophic events, funded by Treasury bonds and repaid by states. While framed as protecting affordability, the primary beneficiary is the insurance industry, not consumers directly.

What the text implies

• States that participate assume a 10-year repayment obligation with interest, potentially crowding out other state spending or requiring tax increases to meet repayment schedules.
• The program does not cap consumer premiums; it protects insurers from insolvency, which may allow insurers to maintain higher premiums while reducing their own catastrophic-loss exposure.
• Trigger amounts are set by the National Academy of Sciences based on a 2% annual probability event (50-year storm), meaning smaller disasters are not covered and insurers retain first-loss exposure below that threshold.
• Private insurers receive federal liquidity support without corresponding federal oversight of their pricing, underwriting, or profit margins—a one-way transfer of risk to the public sector.
• The program may reduce market pressure on insurers to diversify geographically or manage risk, since federal backstop reduces consequences of concentrated exposure in high-risk states.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Citizens benefit from stabilized insurance markets and lower premiums (stated goal), but bear the cost through federal borrowing and eventual repayment via taxes or reduced services. The program protects insurers' solvency rather than capping consumer premiums directly, and states must repay federal funds, shifting disaster costs to state budgets and taxpayers rather than spreading them across the insurance industry.

Who stands to gain

• property and casualty insurers (homeowners, residential)
• surplus line carriers
• state residual market insurance entities

Named in the bill

Department of the Treasury, Secretary of the Treasury, Federal Insurance Office, National Academy of Sciences, National Association of Insurance Commissioners, State insurance regulators, Property and casualty insurers, Homeowners insurance market

Where it stands

• Nov 21, 2025 — Introduced · Congress.gov: “Introduced in House”
• Nov 21, 2025 — Referred to House Committee on Financial Services · Congress.gov: “Referred to the House Committee on Financial Services”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $1,100,000 in lobbying spend. A filing names 68 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Jared Moskowitz, the sponsor, reported $678,646 in PAC receipts in the 2026 cycle.

• Reinsurance Assn of America — $1,100,000 on 3 filings

Lobbying Disclosure Act filings through Jul 23, 2026. A filing shows who paid to lobby on a bill it names, not what changed.