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this paper and the support of the Leavey School of Business of Santa Clara University in attending the conference. In the early 1990s, the United States was struck by a succession of unusually high cost natural disasters. Losses included Hurricane Iniki (1992, $1.5 billion), Hurricane Andrew (1992, $14.5 billion) and the Northridge Earthquake (1994, $12 billion). A major share of the financial burden of these disasters was borne by private insurance markets, and the sheer size of these insured losses has led private insurers to question the wisdom of offering this line of insurance. Unable to sustain another major hit let, alone a mega-catastrophe (for example a hurricane of the force of Andrew hitting Miami with losses in the $50 billion range), private insurance companies have systematically tried to avoid offering the catastrophe line. This has led to fundamental changes in the structure of the catastrophe insurance industry. Because of the importance of catastrophe insurance to mortgage lenders (and therefore ultimately to the whole real estate industry), states at risk to catastrophe losses have intervened to try to ensure that catastrophe insurance remains available. This intervention has taken a number of forms. In two States, Hawaii and California, the States have themselves set up agencies that provide catastrophe insurance coverage. In two other States, Florida and Texas, the Insurance Commissioners, using new laws and regulations, have induced private market companies to participate in joint underwriting associations. In those states in which state government has intervened, private catastrophe insurance, to the extent that it exists at all, is a mere shadow of its former self. These changes are the focus of this paper. We are interested in two questions: 1) ..