Promoting the conservation of natural resources and encouraging risk mitigation efforts along densely populated coastlines in the United States are the best avenues toward managing risk and reducing economic losses, the Reinsurance Association of America testified last month.
In a hearing before the House Subcommittee on Insular Affairs, Oceans and Wildlife on Managing Ocean and Wildlife Resources, Franklin W. Nutter, RAA president, said, “The importance of risk management to the conservation of our ocean, coastal ecosystems and wildlife resources in an increasingly unpredictable environment should be abundantly obvious.”
He said the degree to which coastal areas “have been urbanized and the increasing value at risk–higher property values in higher risk areas–demonstrates the need for federal initiatives that encourage natural disaster mitigation and assistance to protect not only people and property but environmentally sensitive habitats along our coastlines as well.”
Nature must be used to protect ecosystems that provide natural buffers to storms, he said, noting that renewed efforts to preserve coastal areas should be consistent with effective state and federal laws.
In his testimony, Mr. Nutter said the RAA has partnered with other diverse interest groups to create the Americans for Smart Natural Catastrophe Policy Coalition to promote environmentally responsible, fiscally sound approaches to natural catastrophe policy in the interest of public safety.
The Coalition's guiding principles include:
o Building Smart. Properties in coastal areas and other high-hazard areas should be built, replaced or repaired according to current building standards and codes, reflecting exposure to natural disasters and effective loss-reduction measures.
o Encouraging Safety. Government incentives need to promote risk-avoidance and proactive mitigation measures to protect the public from a broad range of natural disasters, including wind, flood, wildfires and earthquakes.
o Using Nature. Renewed efforts should be made to preserve coastal areas, consistent with effective state and federal laws, using uniform, objective standards–protecting ecosystems that provide natural “buffers” to storms.
o Insuring Based On Risk. Private and public property insurance premiums should be established on the basis of risk exposure, including catastrophic risk subject to state law.
o Assuming Responsibility. Rather than shifting financing to the federal government through such means as federal loans or reinsurance, responsibility for state insurance and reinsurance programs that pool natural disaster risks should remain with states that have established such programs.
o Targeting Government Assistance. Programs should focus on people and not on insurance companies.
Members of the Coalition include: American Rivers, Defenders of Wildlife, Environmental Defense Fund, Friends of the Earth, National Wildlife Federation, Republicans for Environmental Protection, Association of Bermuda Insurers and Reinsurers, American Consumer Institute, Americans for Prosperity, Competitive Enterprise Institute, Council for Citizens Against Government Waste, and the National Association of Professional Insurance Agents.
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