Talking up the merits of such a plan was Edward T. Collins, who serves a dual role as national director of ProtectingAmerica.org, which is lobbying for the creation of a national disaster funding mechanism, as well as managing counsel at Allstate Corp., which is the primary industry cheerleader for the proposal.

However, the disaster fund idea has drawn strong opposition from many within the insurance industry and faces an uphill battle in Congress.

To make a federal fund work, the states have to provide a middle layer of support, which could come in the form of a multistate compact. But support from the commissioners here was mixed at best.

North Carolina Insurance Commissioner Jim Long said the proposal will likely have support from lawmakers in his state. "After all, the president pro tem of the Senate is from the Barrier Islands," he noted. However, he doesn't expect any formal approval until the 2009 legislative session.

Alabama Insurance Commissioner Walter Bell, who also serves as NAIC president, said the time is ripe for a more innovative approach to spreading the risk of mega-catastrophes, such as those that hit the Gulf Coast states in 2005.

However, he refused to commit himself to supporting a multistate fund, saying he plans on presenting his governor with a wide range of proposals to deal with the problem of insurance availability in his state.

Louisiana Insurance Commissioner James Donelon said the multistate fund would be a "hard sell" in his state. "We have the three-year protection for homeowners from nonrenewal, and we don't know how that would stand up if we were in such a fund," he added.

Since the proposed fund would actually be an interstate compact, it raises fears of state lawmakers wary of giving up authority to other jurisdictions.

Mr. Donelon said the only way he could see such a compact approved in his state is if the national fund appears likely to be approved--thus jumping on the bandwagon.

A healthy reinsurance industry will play a key role in ensuring communities can recover from any mega-catastrophe, and this will require strong regulation in both U.S. and foreign jurisdictions, conference participants were told. To this end, the government unit in charge of Bermuda's insurance industry is putting the finishing touches on a new risk-based model to analyze insurers' capital adequacy.

Jeremy Cox, supervisor of insurance for the Bermuda Monetary Authority, said the new model should be ready for review in the next few weeks. "The island has a long-standing reputation for its rigorous 'know-your-customer' procedures," he said.

Converging capital adequacy standards for the insurance and investment banking sectors have led to a new layer of scrutiny for the large reinsurance companies based on the island, he added.

The search for alternative forms of capital for both sectors has resulted in the proliferation of reinsurance sidecars and catastrophe bonds--which has also led to new regulatory challenges, Mr. Cox noted. "There is a general overall thinking being applied to evaluating risk in the insurance industry," he said.

Primary insurers, along with modeling and rating agencies, are key players in seeking transparency and capital adequacy in the reinsurance industry. "Security and overall quality has never been more critical," he added.

Bermuda today supplies 40 percent of the property-catastrophe reinsurance to the United States, he noted, "but there is also a growing casualty market, and the island is becoming important in the large commercial risk market at the primary level."

Bermuda hosts 12 of the top 40 reinsurers, according to Mr. Cox, citing Standard & Poor's figures.

"Buying-behavior is changing within the wider context of the global reinsurance market, with primary insurers seeking less concentration of cessions among reinsurers and even greater risk diversification," he said.

Risk securitization has also grown in favor, not only in pure numbers for catastrophe risks but also for third-party credit liability, trade credit and auto insurance risk, according to Mr. Cox.

Just how big a role global warming will play on the catastrophe front over the next decade is an open question, although few doubt that it is an issue that can no longer be ignored.

Larry Shapiro, associate director for program development at the Rockefeller Family Fund, suggested that the NAIC should add climate-change interrogatories to the statutory annual statement in response to the need for public disclosure of insurer risk analysis of climate change.

"In addition, the group should support federal legislation to reduce the emission of greenhouse gases," he said.

William Fugate, Florida's director of emergency services, said no one community can be expected to have enough resources to respond effectively to a mega-disaster.

While states have formal agreements among themselves to share resources, the same is not true for local communities, according to Mr. Fugate. "Nobody has figured out how to move resources within the state," he added.

Mr. Fugate said hurricanes, earthquakes and floods are merely natural phenomena that turn into disasters because of human folly and lack of preparedness.

The best example, he said, is the fact that it took Florida seven years after the mega-catastrophe of Hurricane Andrew to enact tougher building codes. "People said they would make the homes too expensive, but they never talk about the hot tubs and the fact that homes are four times the size today that they used to be," he said.

States can better prepare for emergencies by having reserve funding to avoid reliance on the federal government, while also giving governors the power to cut across agency jurisdictions in emergencies, Mr. Fugate advised.