WASHINGTON, Aug. 22 /PRNewswire/ -- The Following is Being Issued By: ProtectingAmerica.org:

The American Insurance Association has cobbled a catastrophe response plan that is inadequate, incomplete and insufficient, according to the nation's largest coalition of first responders, homeowners insurance companies, disaster recovery experts, and small and large businesses.

"By failing to include a privately financed catastrophe fund, the AIA plan endorses the risky status quo and depends upon a system of year-to-year reinsurance contracts at ever-escalating prices with no lasting or accumulated protection for homeowners," said Pete McDonough, a spokesman for ProtectingAmerica.org.

"The only certainty contained in the AIA proposal is higher premiums for homeowners, and an alarming dependence on offshore reinsurers and financiers," McDonough said.

"Essentially, the AIA is offering American homeowners the equivalent of a car without seatbelts or airbags," he added.

"Defending the status quo -- counting on record-setting rate increases, crossed-fingers and hoping for the best, shortchanges American families," McDonough said.

ProtectingAmerica.org supports the creation of a private-public partnership that would serve as a backstop to the traditional insurance market in the event of a storm or earthquake of catastrophic proportions.

Private insurance company contributions to catastrophe funds would be tax- exempt, as would the funds' earnings. They would grow, year after year, just like personal retirement accounts, and would be tapped only in the case of a catastrophe that would overwhelm the capacity of the private market.

"These funds are no more of a new government program than are IRAs," he added. "To call this a government program is to say that individual IRAs are the Social Security System," he said.

ProtectingAmerica.org is an organization consisting of emergency management officials, first responders, disaster relief experts, insurers and others. At the core of ProtectingAmerica.org's mission is the establishment of a comprehensive, integrated national catastrophe management solution that will better prepare and protect American families, communities, consumers and the American economy from catastrophe. Among its efforts to support this mission, ProtectingAmerica.org is working to increase public awareness and consumer education; advocate for better coordination with local, state and federal mitigation and recovery efforts, and strengthen emergency response and financial mechanisms to rebuild after a major catastrophe.

In addition to its education and public awareness programs, the organization is supporting H.R. 4366 and S. 3117, comprehensive federal legislation that would establish a privately financed national catastrophe fund that would serve as a backstop to state catastrophe funds. The funds' private deposits and the majority of the earnings could only be used to cover replacement and rebuilding costs following major catastrophic events. A portion of the earnings could be used to increase public and consumer education, strengthen first responders, enhance building codes and improve their enforcement.

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Source: ProtectingAmerica.org

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