[Congressional Record Volume 157, Number 149 (Thursday, October 6, 2011)]
[Extensions of Remarks]
[Page E1803]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 INTRODUCTION OF THE DISTRICT OF COLUMBIA NATIONAL DISASTER INSURANCE 
                             PROTECTION ACT

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                       HON. ELEANOR HOLMES NORTON

                      of the district of columbia

                    in the house of representatives

                       Thursday, October 6, 2011

  Ms. NORTON. Mr. Speaker, I rise today to introduce the District of 
Columbia National Disaster Insurance Protection Act. The bill would 
exempt from federal income taxation catastrophic insurance reserves 
held by insurance companies in the District of Columbia. Under current 
federal law, catastrophic insurance reserves are subject to federal 
income taxation, which has led insurers to hold these funds in offshore 
jurisdictions, such as the Cayman Islands and Bermuda, where they are 
not subject to U.S. income taxation.
  The bill would serve important national purposes by protecting 
individuals and businesses across the country from unpaid insurance 
claims in the event of a natural catastrophe, as well as U.S. 
taxpayers. Today, if a natural catastrophe occurred in the U.S., and 
offshore insurance companies did not pay claims, the U.S. government 
might need to step in and taxpayers could be on the hook for the 
claims. Indeed, after the September 11, 2001, terrorist attacks, the 
U.S. government had to establish a federal backstop for losses due to 
terrorist attacks, the Terrorism Risk Insurance Act, which is still in 
place today. As the recent financial crisis showed, the U.S. government 
has a strong interest in preventing systemic financial risks. However, 
U.S. individuals and businesses now rely on offshore jurisdictions to 
preserve and protect catastrophic insurance reserves.
  Rather than leaving little alternative to locating these vital 
catastrophic insurance reserves offshore, it makes sense for the funds 
to be held in the nation's capital, the most protected and secure city 
in the U.S., to eliminate an existing but overlooked vulnerability in 
the financial system. My bill is particularly timely considering that 
the president issued a record number of Major Disaster Declarations in 
2010 (81) and has issued 87 so far this year.

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