He argued that any proposed regulations be done in a way that is national in scope, or at least uniform across state borders.

Thomas Larsen, a senior vice president with Eqecat, Inc. in Oakland, California, said that if there is to be regulation of models, "we'd like to see a more credible and more centralized authority," doing so that would maintain corporate security.

Regulation does not necessarily have to be national in scope and could be done, "perhaps on a regional basis," he said.

Committee chairman and Florida Insurance Commissioner Kevin McCarty suggested the possibility of a regional public model that would serve a similar purpose as a public model devised by his department for Florida.

The public model is an open formula devised by the state that is designed to serve as a median for company models to be measured against, to better gauge their accuracy.

David Lalonde, senior vice president at Boston-based AIR Worldwide Corp., said that models are effectively already regulated, "through the rate and loss costs filings of our customers." Rates based on AIR models have been approved, he added, and its model has been approved by Florida every year that the state has examined models.

"Additional review is not necessary," he said.

Insurers who make use of catastrophe modeling also voiced opposition to the idea of increased regulation.

"If politically motivated restrictions are placed on the models, they will not be as accurate and reliable as they could be, which could lead to both solvency and market concerns," said Eric Goldberg of the American Insurance association.

David Kodama, Property Casualty Insurers Association of America (PCI) director of policy analysis, said limiting the cat modeling industry would ultimately detract from insurers' abilities to accurately gauge their risk.

He expressed concern about requirements forcing insurers to use only models based upon a single, 'one-size-fits-all' set of assumptions.

"These types of restrictions have the potential to prevent insurers from being able to use multiple models which could provide them greater information for decision-making and decrease the actuarial soundness of their pricing. Additionally, these restrictions could ultimately discourage competition among modelers and continual improvements in the technology and science," he added.

Robert Detlefsen, National Association of Mutual Insurance Companies vice president for public policy, said for-profit companies modelers use "applied science" to determine the risk a company is facing based on its own assumptions. "I don't think there's any smoking gun here."

Consumer advocates at the hearing saw things differently arguing that catastrophe modelers provide effectively the same services as rate advisory companies.

J. Robert Hunter, Consumer Federation of America insurance director, said big storm seasons have not cut insurers' profits.

Modelers, he said, can manipulate models by changing the assumptions on which they're based. This, he said, raises the issue of collusive pricing as insurers try to "play modelers off each other" to find a model that will produce the results they are looking for.

Birny Birnbaum, executive director of the Center for Economic Justice, said insurers had promised state officials that if reforms were enacted in the wake of Hurricane Andrew in 1992, they would be able to provide stability to the market through better underwriting. "Where has that stability been?" he asked.