Create a Natural Catastrophe Insurance Interstate Compact to stabilize the insurance market in the face of increased natural disasters. Natural disasters don’t have borders. The federal government moves slowly on creating reinsurance backstops. Insurance Regulation is controlled by the states. Create a Natural Catastrophe Insurance Interstate Compact.  Base the structure of the backstop on the California Earthquake Authority (CEA). CEA’s not-for-profit mission makes California residential earthquake insurance affordable and flexible. There are more than 1 million California policyholders and CEA has $19 billion in claim-paying ability.

• Created after the 6.7 magnitude 1994 Northridge earthquake—which damaged or destroyed thousands of homes—CEA was created by the California Legislature in 1996 to offer earthquake insurance coverage in California.
• The affordable and flexible policies—based on the best available science—have expanded over two decades. The CEA works with 22 participating residential insurance companies to offer residents home insurance policies.

Spread the risk of natural disasters like wildfires across multiple states through a Natural Catastrophe Insurance Interstate Compact

• An interstate compact is a contract or agreement between states that allows states to cooperate on multi-state or national issues while retaining state control.
• Interstate compacts are specifically mentioned in the U.S. Constitution. Although historically used to address border disputes and water rights, the use of interstate compacts has expanded significantly in recent decades to cover professional licensing, supervision of offenders, educational reform, adoption, drivers’ licensing and vehicle registration, environmental issues, emergency management and other issues.
• Over 200 interstate compacts currently exist, and on average every state in the nation belongs to at least 25 compacts.