I have a few problems with this proposed legislation The plan amounts to another taxpayer bailout waiting to happen at best and a state sponsored Ponzi-scheme at worst. $150 Million doesn’t even begin to fund a statewide earthquake pool, and shell corporations can post letters of credit, collect huge interest payments with questionable debt instruments and then just fold their little corporations like tents moments after the big one strikes. There is a reason why earthquake insurers under the present system have been carefully structured with sound reinsurance in place. I am extremely leary of any legislature that triples our state debt in four years having anything to do with manufacturing a defacto insurance company. The experiment of an alternative financing arrangement could create a disaster bigger than the earthquake it’s designed to protect.
I have a few problems with this proposed legislation The plan amounts to another taxpayer bailout waiting to happen at best and a state sponsored Ponzi-scheme at worst. $150 Million doesn’t even begin to fund a statewide earthquake pool, and shell corporations can post letters of credit, collect huge interest payments with questionable debt instruments and then just fold their little corporations like tents moments after the big one strikes. There is a reason why earthquake insurers under the present system have been carefully structured with sound reinsurance in place. I am extremely leary of any legislature that triples our state debt in four years having anything to do with manufacturing a defacto insurance company. The experiment of an alternative financing arrangement could create a disaster bigger than the earthquake it’s designed to protect.