Federal backstop for state insurance programs could cost taxpayers billions
H.R. 827 — Homeowners’ Defense Act of 2025 · Filed by Frederica Wilson (D-FL) · 2 cosponsors · Introduced Jan 28, 2025 · Referred to committee
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What it does
This bill creates a federal backstop for state catastrophe insurance programs (like Florida's Citizens Property Insurance Corp.) by authorizing the Treasury Secretary to guarantee debt issued by these programs, provide reinsurance coverage, and fund mitigation grants. It establishes a Federal Natural Catastrophe Reinsurance Fund and requires state programs to meet strict financial and operational standards. The goal is to stabilize private insurance markets and help states pay claims after major hurricanes, earthquakes, or other disasters without using federal disaster aid.
Why we flagged it
The bill's core function is to create federal debt guarantees and reinsurance mechanisms for state-run catastrophe insurance programs, with secondary mitigation and grant provisions. It is fundamentally a financial risk-transfer instrument, not a consumer protection or rate-regulation bill.
What the text implies
- Federal liability is capped at $20.5B in guarantees but unlimited for reinsurance claims, creating potential for open-ended taxpayer exposure if multiple catastrophic events occur in a single year.
- The bill requires state programs to use 'actuarially sound' pricing but does not mandate rate caps or affordability standards, meaning premiums can still rise sharply even with federal backing.
- Mitigation grants are tied to reinsurance fund investment income (35% minimum), creating a perverse incentive: the fund only grows if claims are low, potentially starving mitigation efforts during high-loss years.
- State residual markets (insurer-of-last-resort programs) are grandfathered in as 'eligible' for 5 years without meeting the bill's strict operational standards, creating a two-tier system.
- The bill does not address whether federal guarantees will reduce private reinsurance availability or increase its cost, potentially shifting more risk to the federal government over time.
Who it affects
Homeowners in catastrophe-prone states gain access to more stable insurance and lower premiums through federal backing and mitigation funding. However, the bill creates a significant federal liability (up to $20.5 billion in guarantees) that taxpayers ultimately bear if state programs fail, and it prioritizes private insurance market stability over direct consumer protections or rate caps.
Who stands to gain
- state catastrophe insurance programs
- property insurers writing residential coverage
- reinsurance companies (through federal reinsurance contracts)
- homebuilders and real estate professionals (through mitigation consulting)
Named in the bill
Treasury Secretary, HUD Secretary, Federal Natural Catastrophe Reinsurance Fund, State catastrophe insurance programs, Citizens Property Insurance Corp (implied), National Association of Insurance Commissioners, Comptroller General, Attorney General
Where it stands
2 cosponsors: 2 Democrats.
- Jan 28, 2025 — Introduced · Congress.gov: “Introduced in House”
- Jan 28, 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
4 lobbying clients named this bill on 8 disclosure filings across 3 quarters, Dec 2025 to Jun 2026. Those filings disclosed $2,323,165 in lobbying spend. A filing names 66 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 72% of bills with at least one filing.
Frederica Wilson, the sponsor, reported $119,000 in PAC receipts in the 2026 cycle.
- Reinsurance Assn of America — $1,100,000 on 3 filings
- National Association of Mutual Insurance Companies — $1,005,758 on 2 filings
- Housing Policy Council — $120,000 on 2 filings
- American Family Mutual Insurance Company, S.i. — $97,407 on 1 filing
Lobbying Disclosure Act filings through Jul 23, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the full bill text on Jun 8, 2026; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 23, 2026 · page rendered 2026-10-20.
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