Seen in in Insurance Journal:
Dozens of citizens gathered to listen as politicians, regulators and insurers presented possible answers during a half-day session hosted by the National Association of Insurance Commissioners.[...]
U.S. Rep. Tim Mahoney, R-Fla., attended Monday’s hearing telephonically and presented a summary of a bill he co-sponsored with U.S. Rep. Ron Klein, D-Fla. The Homeowners’ Defense Act of 2007 would establish a federally-administered catastrophic insurance program to issue bonds that would provide backstop coverage to state-sponsored insurance funds following a natural disaster, according to Mahoney.
Mahoney said the legislation allows states to responsibly plan for disasters ahead of time, while providing emergency relief for states located in lower-risk regions. [...]
John Miletti of The Travelers said the primary challenges for consumers are availability and affordability while policy makers have to consider economic growth and disaster recovery. Insurance carriers must deal with each state’s regulatory environment and reasonable long-term profitability, he added.
Travelers has announced its own proposal for discussion, one that would join states from Maine to Texas in a regional catastrophe plan. The program would continue state regulation for certain matters including solvency and residual market regulation while maintaining a market of last resort as a safety net. It would also ensure that the rating approach is consistent with a federal program for pre- and post-event funding.
The Travelers scenario would change the CAT reserve accounting approach to “accrued over time” rather than when incurred, according to Miletti, and people living in coastal and flood zones would be required to participate in the National Flood Insurance Program. The federal government would provide economic incentives for states based on their adoption and enforcement of federal building standards and other mitigation/loss reduction programs, Miletti added.
At least there seems to be some movement on insurers and regulators working together to find a better solution to the mess, as opposed to federal legislators seeking to simply wave their magic wands….