Mega-catastrophe risk insurance coverage will top the agenda at the spring meeting of the National Association of Insurance Commissioners, beginning Saturday in Orlando, Fla.
A proposal developed by Florida Insurance Commissioner Kevin McCarty will face full regulator scrutiny and a possible up or down vote at the session set for March 4-7.
The most controversial aspect of the plan centers on proposed state and federal funds to provide a backstop for natural catastrophe risk similar to the one that is in place for terror risk.
Mr. McCarty withdrew the all-perils plan that would have insurers cover flood risk for the first time in over 40 years after it drew stiff resistance from the industry.
The American Insurance Association has opposed the backstop fund plan from the outset, while the two other property-casualty trade groups have so far remained silent on the issue while a consensus is developed in their organizations.
Donald Griffin, vice president of the Property Casualty Insurers Association of America, said the time was right for a full discussion, but expressed concerns about “early versions of the proposal that have contained a variety of mandates.”
On the international front, regulators will once again look at reducing collateral requirements for non-U.S.-domiciled reinsurers. NAIC President and Maine Superintendent Al Iuppa called 2006 the year of decision on the issue at the last week's meeting of the National Conference of Insurance Legislators.
“Any credible alternative to the current requirement must first protect the security and solvency of the U.S. insurance market, and second place the burden of risk from any miscalculations in the proposal on those seeking to change the current system,” said Dave Snyder, AIA assistant general counsel.
Other issues on the agenda of concern to p-c insurers include revisions to the Insurance Receivership Model Act that was approved by the full NAIC body last December.
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