Senator Michael Balboni (R-East Williston), chairman of the state Senate committee dealing with homeland security, is concerned that New Yorkers may not be adequately shielded financially from a true catastrophe precipitated by storms, other natural events or terrorist actions. As a result, Balboni, who is also a member of the Senate Insurance Committee, said he is sponsoring a bill to better protect residents from losses with the creation of a public-private funding mechanism similar to those in other states.

"New Yorkers, especially in the metro area, are particularly vulnerable to catastrophic expenses resulting from catastrophic events. High property values and replacement costs would break the back of our insurance system if we were hit by a major catastrophe," Balboni said. "According to the head of the National Hurricane Center the number of hurricanes from the 1970s to the mid-1990s was low, but now frequency is increasing, and this period of heightened activity could last another 10 to 20 years."

The cyclic increase in tropical storms is made more dangerous because of the growth in coastal populations in recent years. An estimated 85 percent of coastal residents have never experienced a major hurricane, Max Mayfield, the director of the National Hurricane Center told a U.S. Senate committee last week.

Balboni's proposal would create the New York Catastophe Fund, a public-private partnership that would act as a backstop to strengthen the weaknesses of the current system. Assemblyman Robert Sweeney (D-Lindenhurst) plans to introduce the bill in the Assembly.

The legislation proposes reforms similar to so-called "CAT" funds in some other states, such as Florida, for hurricanes, and California, for earthquakes.

Florida's fund was in place last year after hurricane losses from four consecutive hurricanes over a six-week period strained the entire insurance industry and caused widespread economic losses. The fund's provisions were credited with helping several insurance companies from becoming bankrupt or insolvent, and more quickly responding to recovery efforts.

"This is a consumer-first bill intended to assure New Yorkers that there will be a more certain and speedier rebuilding process in the aftermath of any true catastrophe," Balboni said.

Currently, many residents are unaware that property insurance in some instances does not cover aspects of terrorist-caused destruction, such as fallout from weapons of mass destruction. Also, a true catastrophe caused by nature may hinder the ability of insurance companies and government to respond quickly and orderly.

Balboni, who discussed the legislation at a beachfront press conference, said replacement costs and regional economic disruption from a catastrophe would be staggering. This is particularly pertinent as we head into the height of the hurricane season, he said.

"It has been nearly 70 years since a hurricane of catastrophic magnitude hit Long Island, which then was sparsely populated along the shoreline with no real property value density," Balboni said. "A true storm catastrophe today, which many forecasters say is long overdue, would not be dealt with adequately, further spreading the adverse economic impact to the region."

The hurricane of Sept. 21, 1938, known as "The Long Island Express," resulted in 700 deaths, $308 million in damages and left 63,000 people homeless between Long Island and New England. Winds blew up to 130 miles per hour and wave action was so powerful that the storm carved out what is now known as the Shinnecock Inlet.

If a hurricane of similar force hit Long Island, replacement costs would be in the tens of billions of dollars. The costs for other major catastrophes that might befall areas of the state would wreak similar economic havoc.

According to Balboni, state legislators supporting the bill were mindful of several recent findings and warnings on the subject of catastrophe that prompted them to propose the legislation, including a finding by the Government Accountability Office (GAO) that "the (insurance) industry has not been tested by a major catastrophic event..." Such an event, the GAO recently reported, "could severely disrupt insurance markets and impose recovery costs on governments, businesses and individuals."