FL Congressmen Urging Lawmakers to Pass Bill Stabilizing P/C Insurance Market
This afternoon Florida congressmen will urge lawmakers to pass legislation designed to stabilize the property insurance market in disaster-prone areas.
Introduced last month by Reps. Ron Klein and Tim Mahoney, the bill would allow state insurance funds to share the risk of a major natural disaster-related loss with one another.
However, the Reinsurance Association of America, which represents insurers that take on the risk of large losses from insurance claims, opposes government-run catastrophe funds, calling it "misguided at best" in a position paper, and asserting that the private sector can do so more effectively.
Previous attempts to create a national fund have failed because proposals involved adding a surcharge to all property insurance policies to build it, and representatives in states that are not prone to disasters did not want their residents paying more.
The new proposal, though, gives states the option of participating and is driven by private investors.
President Bush's administration has opposed the idea of a national catastrophe fund. Edward Lazear, chairman of the White House Council of Economic Advisers, has said the Bush administration opposes the idea because it would displace the private market and have unintended economic consequences.
Scheduled to speak at the 2 p.m. hearing of the House Financial Services Committee are: Phillip Swagel, the Treasury Department's assistant secretary for economic policy, Hawaii's insurance commissioner, J.P. Schmidt, Matthew Patrick, a member of the Massachusetts House of Representatives, former Rep. Tom Evans, chairman of a Florida preservation group, Danyal Ozizmir of insurer Swiss Re, John Seo, cofounder of Fermat Capital Management LLC, Franklin Nutter, president of the Reinsurance Association of America and several other experts and industry officials.
Source: Source: AP | Published on September 6, 2007
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