Earlier this month, the National Association of Insurance Commissioners urged Congress to consider creation of state and federal catastrophe funds to shore up the industry in the event of a mega-catastrophe.

The American Insurance Association immediately opposed such a program, while the Property Casualty Insurers Association of America and NAMIC are taking a more wait-and-see approach.

Robert Detlefsen, NAMIC public policy director, said that too many questions are so far unanswered, particularly in regard to the actual insurance capacity, to rush to judgment as to whether state and federal backstops will be needed in the event of a mega-catastrophe.

He said that a number of studies were underway that may bring more definitive answers by early next year. “Let's not jump the gun here. There is still a lot we don't know,” he said.

The NAMIC paper took traditional insurance industry stands on the need for competitive rating for property coverage and more actuarially sound pricing for the National Flood Insurance Program.

In addition, the paper called for mitigation measures to make properties in harms way better able to withstand catastrophes, an “indispensable aspect of any risk management and insurance initiative.”

Federal financial incentives to encourage states to adopt and enforce strong building codes should play a critical role in any such plan, the statement said.