The National Conference of Insurance Legislators put off any action on endorsing a national mega-catastrophe risk program at the group's summer meeting in Boston last weekend.
Florida State Sen. Steve Geller, D-Hallandale Beach, had successfully urged the subcommittee he chairs to approve a discussion paper jointly developed with the National Association of Insurance Commissioners.
But while panel members heeded Sen. Geller's advice, the parent Property-Casualty Committee ultimately decided to keep the issue in the lower committee while other members worked out disagreements.
Mr. Geller had urged some sort of action at the meeting so as to show his NAIC counterparts that the lawmakers were serious about the issue. But subcommittee members felt the differences should be worked out in their panel since that is why it was formed.
In the end, Mr. Geller said the action, or lack of it, was irrelevant since the NAIC had itself not moved on the document.
Mr. Geller and his home state regulator, Florida Insurance Commissioner Kevin McCarty, had released a joint “discussion paper” last month outlining the steps they believe had to be taken in order to shore up the property-casualty industry in the event of a mega-catastrophe causing insured losses over $50 billion.
But the proposal has many controversial items such as state and federal funds to provide a backstop in the event of a mega-catastrophe, along with some mechanism to encourage more homeowners to purchase flood insurance, about which the insurance industry raised concerns.
North Dakota State Rep. George Keiser, R-Bismarck, said that while he had some problems with the substance of the discussion paper, he was mainly concerned about the procedural aspects.
And former president and New York State Sen. William Larkin, R-New Windsor, put it more bluntly when he said he did not want NCOIL to be seen as a “stepchild” of the NAIC. This was despite the fact that he had no problem with the concept of a state fund, since he was supporting one in his home state.
The next move will be at the NAIC meeting in September when Mr. McCarty could seek to gain more support for his plan for a national mega-catastrophe plan. At the summer meeting last month, he succeeded in getting the plenary body to offer support for a U.S. Senate commission looking into the impact any natural mega-catastrophe would have on the insurance industry.
Between now and then, Mr. Geller and members of the subcommittee with some regulators will work on refining the discussion paper to meet any objections by the state lawmakers.
The full NCOIL executive committee did approve a resolution urging the strengthening of state building codes as a means of dealing with catastrophe risk.
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