REALITY: The private insurance industry has insured wind and earthquake risks, including the unprecedented losses of the 2005 hurricane season.

• History proves the private sector has insured catastrophic natural disasters and, if market dynamics are allowed to work, has plentiful capacity to do so in the future.

History proves the private sector has insured catastrophic natural disasters and, if market dynamics are allowed to work, has plentiful capacity to do so in the future. In June 2007 report, Bernstein Research estimated that the world reinsurance capacity was at least $2 trillion in 2006 and likely much more.