NEW YORK--The National Conference of Insurance Legislators Subcommittee on Natural Disasters voted down an amended resolution today that would have supported the establishment of state catastrophe funds that would be eligible to receive federal funds.

The vote today was split among the eight present subcommittee members attending the meeting here and so it did not receive the majority vote necessary to proceed out of the subcommittee.

Florida State Sen. Steven Geller, D-Hallandale Beach, co-chair of the subcommittee, proposed the resolution, which contained changes to a previous resolution that was not voted on at NCOIL's last meeting in Washington, D.C. due to concerns expressed at the time by insurance associations and others.

The amended resolution would have allowed states to establish catastrophe funds "which may be eligible to receive federal funds under specified conditions."

It stipulated that if a natural disaster caused losses to exceed an unspecified "designated threshold," then the federal government would provide the appropriate state fund with money to cover insured losses above the threshold.

"The federal options should include a catastrophe reinsurance backstop and a federal loan program," the resolution stated. For both the loan program and the backstop, the resolution contained language that the states would, over time, reimburse the federal government.

The resolution also said "that NCOIL believes such a state-federal system would result in dramatically lower property-casualty insurance rates and would substantially strengthen the solvency of the private sector insurance industry, to the benefit of citizens nationwide."

Sen. Geller said the amended resolution was vaguer than the previous version so that it would be less controversial and would not get held up by details.

He said that he has been pushing for a national catastrophe plan for 10 years, and in that time he had compromised away many details that he supported. He noted, however, that passing a resolution that put some sort of federal program in place was better than passing nothing.

But the vagueness of the amended resolution was precisely what caused some of the opposition among the subcommittee members.

New York Assemblyman Ivan LaFayette, D-Queens, said that more details are needed to vote on such a resolution, and New York Sen. William J. Larkin Jr., R-C-Cornwall, objected to the notion of having a "designated threshold" above which federal funds would be available without defining what the threshold would be.

Regarding the limited timeframe that the subcommittee had to review and vote on the resolution, Sen. Larkin said, "Haste makes waste."

The resolution received statements of support from representatives from Allstate Insurance Company and State Farm.

Industry associations, including the Reinsurance Association of America (RAA), the Property Casualty Insurers Association of America (PCI), and the American Insurance Association (AIA), and the National Association of Mutual Insurance Companies (NAMIC) opposed the resolution and stated that national efforts should focus on mitigation.

A representative from NAMIC conceded that some of its members did not conform entirely to the association's position, but the association and its members do agree that any catastrophe backstop should be reserved strictly for mega catastrophes.

Sen. Geller agreed, but said the actual loss threshold in the resolution, like many other specific details, was intentionally left blank so that Congress could define it.

To counter a belief among some of the resolution's critics that any national catastrophe plan would be a subsidy for Florida specifically, Sen. Geller played an edited video from a Weather Channel series that outlined major catastrophes that could occur at any time all around the country. Among them were wildfires in parts of Texas and Calif.; hurricanes in New York, Savannah, Georgia and Houston; earthquakes in Las Vegas, Seattle and the Mississippi River Valley; a volcanic eruption in Washington State; and serious tornadoes affecting cities such as Dallas and St. Louis.

After the subcommittee meeting, Sen. Geller expressed doubt that any national catastrophe resolution would pass through the subcommittee. He noted that he has been a key proponent of the measure, and that this meeting was his last NCOIL meeting. He said he had some clout as a state senate minority leader and a past president of NCOIL, and added that he doubted a similar resolution would get passed in the future based on the results of his efforts.