Olympia -- South King County lawmakers are working with businesses to address the flood insurance crisis in the Green River Valley.

Although the federal government, through FEMA, provides subsidized homeowners flood insurance and limited business coverage, many companies are reporting that the private insurance policies, known as "surplus lines," have been canceled or cannot be purchased at an affordable cost. There are concerns that flood fears and intense media coverage have exacerbated the problem.

The mayors of Kent, Auburn, Pacific, Algona, Tukwila, Senate Majority Floor Leader Sen. Tracey Eide, Sen. Margarita Prentice, Sen. Claudia Kauffman, Rep. Tina Orwall and Rep. Dave Upthegrove participated in a discussion organized by Sen. Karen Keiser (D-Kent) on possible solutions. The crisis is creating severe economic hardship and is damaging the economic climate of the region’s largest manufacturing and distribution center. Several individual business owners shared their concerns in the meeting. Many businesses have millions of dollars in manufacturing equipment installed in buildings near the potential flood area.

One proposal involved legislation to give the state insurance commissioner authority to create a “joint underwriting association” to address this crisis. The insurance commissioner would appoint a board to set premiums and offer flood coverage to the businesses in the flood plain. The JUA would then function as a not-for-profit insurer of last resort. The JUA would be dissolved after the problems with the Howard Hanson Dam are repaired and flood coverage is again available to businesses in the area, which could take three or four years.

“The Green River Valley is the second largest wholesale distribution center in the West Coast,” said Keiser who represents part of the Valley. “Current insurance caps won’t begin to cover some of the losses. These businesses need help now.”

“It is important for us to quickly step in to address the needs of businesses in our

community during this challenging time,” said Rep. Orwall. “I look forward to championing this effort in the House.”

Mayor Pete Lewis of Auburn said urgent action is needed to calm business anxiety and provide affordable insurance.

“This tough recession is already a challenge for our business community and our cities,” Lewis said. “This problem is making it almost impossible for many key employers to conduct normal business activities.”

The gross business income of Kent alone is $8 billion. Many manufacturing, distribution and pharmaceutical companies have expensive inventory and equipment that cannot be moved. Right now businesses can’t find insurers willing to cover more than $1 million for buildings and contents. Some businesses are already making plans to move out of state for fear of being financially unprotected.

Sen. Adam Kline, whose district could be adversely affected by severe flooding, says the problem must be addressed to preserve jobs.

“At a time when job-losses have already taken their toll in this area, we need to help struggling businesses maintain their operations so that jobs are maintained,” Kline said. “State government has a role to play in this, and we intend to play it to the fullest extent.”

JUAs are not new to Washington or many other states. Similar associations have successfully provided insurance products where the private market declines to participate, including condominium contractors and even midwives. The creation of a JUA for this crisis will take specific legislation granting the authority to set up the program. Sometimes just the mere act of creating the potential for a JUA causes the private market to return.

A recent study of Green River Valley businesses by the King County Flood District found that while 95 percent of respondents were aware of the flood risk, only 46 percent had flood insurance.