WASHINGTON, D.C.–The National Association of Insurance Commissioners approved a resolution calling for Congress to create a commission to look at national solutions to cover mega-catastrophe risk.

Sunday's vote culminated more than six months of debate following last year's record insured storm losses and looks at new mitigation incentives, as well as state and federal catastrophe funds, to help provide more mega-catastrophe risk coverage.

The resolution came during the Kansas City, Mo.-based association's meeting here this week.

The insurance industry has supported some of the mitigation proposals but has actively opposed, or has remained ambivalent, on the creation of funds, with the notable exception of Allstate, which has spearheaded a public relations effort in favor of them.

At the NAIC's plenary meeting, Ohio Insurance Commissioner Ann Womer Benjamin expressed concern that the resolution seemed to ask Congress to enact solutions that could perhaps be addressed in the states.

Florida Insurance Commissioner Kevin McCarty, the sponsor of the resolution, said there are certain things only Congress can accomplish, such as the creation of a federal backstop fund.

When the program was first proposed earlier this year, it contained a provision for a so-called all-perils policy in which carriers would cover flood risk, now covered under the National Flood Insurance Program.

The industry, including Allstate, protested vigorously, and the proposal was soon modified to work more in conjunction with the federal flood program.

The fact that up to half of homeowners affected by the '05 storms were said to be without coverage was the impetus behind the measure.

Mr. McCarty said the federal government's role as a backer of the mortgage market will give it an interest in ensuring properties have sufficient coverage in the event of a catastrophe.

“We want to elevate this discussion on a national level, because we are going to pay for this if people walk away from their mortgages,” he said.

“We see so many people in the Katrina-Rita situation that were either uninsured or underinsured, and we have $12.5 billion in block grants from the federal government going to rebuilding homes. This is a bad formula for how people are going to behave in the future,” Mr. McCarty said.

California regulator Rick Baum said insurers' new unwillingness to insure catastrophe risk has created a federal problem. “If you don't have a program that provides some kind of certainty to the insurance carrier in terms of mega-catastrophe, they are going to get out all together,” he said.

Mr. Baum said that perhaps the insurance companies' reluctance to endorse federal and state funds was that the certainty they would provide the marketplace would invite new competition.

As for the next step, the commission that the resolution calls for has already been proposed by Sens. Bill Nelson of Florida and Mary Landrieu of Louisiana.

There are also several flood program reform measures under consideration in the U.S. Senate.