SENATOR HOPES KATRINA WILL SPUR FED CAT FUND

US Senator Bill Nelson said yesterday that he hoped legislators seeing the devastation of New Orleans and Mississippi would finally see the wisdom in setting up a federal programme that would permit insurers to create catastrophe funds. Speaking to the Economic Club of Florida, Senator Nelson sad he planned to promote the idea as a member of the Senate Commerce Committee. Meanwhile Representative Mark Foley said that “I’ve been telling my colleagues sooner or later we would face a catastrophe unfathomable in financial terms and the insurance companies would not be able to bear it. This is the gut-wrenching experience people are going to have to see to finally get some attention”. Senator Nelson, who helped establish Florida’s Catastrophe Fund after hurricane Andrew struck in 1992, said that a federal programme would work differently, with each insurer having its own account, “instead of setting up another gargantuan bureaucracy”. Don Griffin, vice-president of the Property Casualty Insurers Association of America, told Associated Press that “it can be a national problem, as we are seeing evidenced today”.