The members he mentioned would likely head up their panels if Democrats take over the House in the next Congress.

“Number one is to take away the antitrust exemption of the insurance industry,” Rep. Taylor said. “No one should be above the law.”

The task force report unveiled by the two congressmen also seeks a broad investigation of the Katrina claims practices of insurance companies that contract with the National Flood Insurance Program to settle claims for flood damages filed by victims of hurricanes.

At the same time, they also said they would support creation of what they termed a government-backed “all-perils” disaster insurance coverage–something some members of the property-casualty insurance industry have been advocating for a decade.

Two different proposals to do so have recently been advanced, and a hearing on the issue was held last month by a subcommittee of the House Financial Services Committee.

In fact, a group backed by Allstate–ProtectingAmerica.org–was formed to create interest, both inside and outside of Congress, for creation of a national, mutual insurance company to build up tax-free reserves that would–over time–be used to deal with catastrophic losses such as another major hurricane or earthquake. The proposal is opposed by many other insurers.

Rep. Taylor has a personal interest in the issue of Katrina claims handling. His home in southern Mississippi was demolished by the hurricane, and he has been battling his carrier over the damages every since.

He said at the press conference that the biggest Katrina fraud of them all was the insurance industry practice of declaring that hurricane damage was due to flooding (a federal government responsibility) rather than wind (covered by private insurance).

The report said State Farm, Nationwide, Allstate and other insurers had paid hundreds of thousands of wind claims inland, where they could not possibly blame the storm surge, but denied wind claims near the coastline, where winds were stronger and water was also present.

Reacting to the report, June Holmes, acting chief executive of the Property Casualty Insurers Association of America, said that “the limited antitrust exemption provided by the McCarran-Ferguson Act promotes competition in the marketplace by allowing insurers to exchange critical data regarding losses and other factors.”

Moreover, she said, “the exemption–which has been on the books for more than 60 years–helps residual markets such as assigned risk and FAIR plans operate more efficiently, facilitates participation in and oversight of state guaranty funds, and permits state control over liquidation of insurers.”

Without the exemption, Ms. Holmes said, “small and medium-sized insurers–companies that play a crucial role in providing insurance protection to millions of American motorists, homeowners and businesses–would be at a competitive disadvantage and would find it much more difficult to enter new geographic markets or expand into new lines of business.”