A renewed push in Washington for a federal natural-disaster reinsurance backstop has potential implications for global reinsurance hubs.

Jared Moskowitz, the Democratic congressman from Florida, has reintroduced the Natural Disaster Risk Reinsurance Act, a measure aimed at lowering homeowners’ premiums by shifting part of the extreme tail risk from private insurers to the United States Treasury. Florida continues to face the highest average home-insurance rates in the country, driven largely by rising reinsurance costs and the withdrawal of major carriers from the state, he said in a statement.

The proposal would create a Natural Disaster Risk Reinsurance Programme inside the Treasury Department, covering events from 2026 onward. The goal, according to the Bill, is to protect insurers “from insolvency resulting from covered events of a significant magnitude” while keeping insurance affordable.

If adopted, states could opt in voluntarily and would receive federal support only after disaster losses exceed a state-specific threshold, known as a trigger amount. Those triggers would be calculated by the National Academy of Sciences, which must review and revise the figures every two years.

Once losses pass that mark, the Treasury would make payments to the state and issue federally guaranteed bonds to fund them. States must then repay the Treasury over ten years, pledging their full faith and credit in advance.

Mr Moskowitz said the measure is designed to ease the pressure on homeowners. “Insurance costs are crushing Florida families, and they deserve real relief — not excuses,” he said. Independent estimates cited by his office claim the federal backstop could reduce premiums by about 25 per cent for the average Florida household.

The Bill resembles the US Terrorism Risk Insurance Act model: insurers retain the first layer of losses, while the federal government backstops rare, catastrophic events. The programme would cover a wide range of perils including hurricanes, wildfires, earthquakes and tornadoes, though not flooding, which remains under the National Flood Insurance Programme, according to the text of the Bill.

The proposal also comes in the same month that Florida governor Ron DeSantis used his first official visit to Bermuda to tout how litigation reforms had attracted record levels of reinsurance capital back into the state.

Speaking at the PwC Insurance Summit, Mr DeSantis said Florida’s legal overhaul had stabilised the market and spurred Bermudian-based reinsurers to increase their investment fivefold.

Bermuda’s market now plays a central role in Florida’s recovery, he said.

The Bill authorises the Treasury to collect premium-rate information from insurers annually through the National Association of Insurance Commissioners.

Mr Moskowitz first introduced the legislation in 2023, but market pressures have since intensified, he said. Insurers have continued to exit states such as Florida, California and Louisiana, according to researchers, citing higher capital costs and more severe disaster losses.

The Bill will now proceed to committee consideration.

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