Catastrophe bonds are insurance-linked securities that offset major costs to taxpayers and insurers caused by natural disasters such as hurricanes and earthquakes.
For more than a decade, members of Congress have proposed various bills to establish a federal “backstop,” “catastrophe fund,” or “guarantee mechanism” for private losses in cases of disaster.
Reauthorization of the National Flood Insurance Program (NFIP) has been a political football in recent years, with Congress unwilling to commit to reform.
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