The proposed legislation has gained backing from key senators such as Sen. Trent Lott, R-Miss., Rep. Gene Taylor, D-Miss., announced Monday during a Capitol Hill discussion of the state of the wind insurance market in the Gulf Coast. Last week, the House Financial Services Committee gave its approval to the Flood Insurance Reform and Modernization Act, which provides for the windstorm offering.
According to Lloyd Dixon, senior economist at the Santa Monica, CA-based RAND Corporation, smaller businesses along the Gulf Coast have faced more severe property rate increases than their larger counterparts. Dixon, who participated in the discussion and co-authored a report on the Gulf wind insurance market that was released a few days ago, also said the price hikes reflected smaller companies’ lack of geographical diversity and their relatively weak bargaining position when dealing with insurers.
Dixon says that the tight commercial property market on the Gulf has led more and more commercial policyholders to turn to surplus lines insurers and residual markets in their search for coverage.