Governments, both state and local, would best help resolve problems with catastrophe insurance by staying out of it, according to researchers at the Institute for Policy Innovation.

George Pieler and Lawrence Hunter, senior research fellows at the IPI think tank, which has offices in Dallas and Washington, D.C., released a statement calling for officials to adopt a hands-off approach.

They said a key element of resolving catastrophic insurance coverage problems is to remove governments from the political process.

"The only way to get people the insurance they need, at a price they can manage, is to get government out of the way," they said.

Currently, the researchers noted, insurance-related public policy is dictated at both the state and federal levels, but in an uncoordinated "scattershot" manner. States, they said, control pricing through means such as rate setting, while the federal government offers a backstop for some lines in the form of the Terrorism Risk Insurance Act.

"It's the 'genius' of federalism gone bad: a morass of regulatory constraints, consumer protections, subsidies and guarantees whose only unifying purpose is taking decisions away from the market," according to IPI.

The organization argues that, ultimately, taxpayers bear the economic brunt of regulatory public policy decisions, which Mr. Pieler and Mr. Hunter said often distort the relationship between true risk and true price. By severing that link, they added, government policies can transform individual coverage from a measured and priced risk into a contingent benefit paid from a tax-funded pool.

"When risk management services are treated like a public utility, chopped up by preemption, mandates, multilayered regulatory micromanagement and populist grandstanding, they can't make viable business plans for the modern economy," said IPI.