Financing Natural Catastrophe Exposure:
Issues and Options for Improving Risk Transfer Markets

The federal government has an established institutional framework for disaster preparedness, reduction, prevention, and responsemainly disaster assistance. However, concerns have been expressed about the nations increasing exposure and vulnerability to natural hazards. The rising cost of financing recovery and reconstruction following natural disasters, reports of the nations increasing vulnerability to coastal hazards, questions concerning the capacity of state and local governments and private insurers to deal with the rising costs, and disagreements concerning the appropriate role of the federal government in dealing with these costs have all become major topics of congressional debate.