Insurers' organizations and consumer groups are gearing up to fight a National Association of Insurance Commissioners resolution endorsing a proposed new federal role for the catastrophe insurance marketplace.
NAIC's Property Casualty Committee approved a resolution by conference call Tuesday backing the efforts of Florida and Louisiana senators to create a commission to look at ways of shoring up the insurance marketplace in the event of a repeat of the 2005 hurricane season and its record losses.
The measure will now go to the full NAIC body for final approval at its quarterly meeting later this month where it could meet opposition from not only industry and consumer representatives but commissioners wary about endorsing a new role for government in the property insurance marketplace.
According to Robert Detlefsen, public policy director for the National Association of Mutual Insurance Companies, the resolution commits the NAIC to a very specific course of action, which he feels is inappropriate at this time.
Florida Insurance Commissioner Kevin McCarty spearheaded the resolution approved Tuesday as a means of bolstering his proposal for a new federal-state backstop role for the mega-catastrophe risk market.
He first introduced the proposal last November at a catastrophe summit conference sponsored by California Insurance Commissioner John Garamendi.
The American Insurance Association opposed the plan from the outset, while NAMIC and the Property Casualty Insurers Association of America have expressed doubts about it.
Mr. Detlefsen said the jury is still out on whether there is enough private capacity to meet the needs of the policyholders in the event of another mega-catastrophe.
Also this week, Mr. McCarty gained the support of the National Conference of Insurance Legislators to at least consider the proposal at the group's summer meeting in Boston next month.
Former NCOIL president and Florida Sen. Steve Geller, D.-Hallandale Beach, noted that the lawmakers group has long been an advocate for a national approach because it believes the industry would not have the capacity to handle a $100 billion event.
Robert Hunter, insurance director for the Consumer Federation of America, said the NAIC resolution avoids mentioning what Congress should do to fix the National Flood Insurance Program and fails to provide new enforcement measures to ensure the program does not encourage more unsafe construction.
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