New Act to Address Increasing Problem of Natural Disasters
The Independent Insurance Agents & Brokers of America (the Big “I”) is cheering Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.) for their sponsorship of the Homeowners' Defense Act of 2007, a new bill targeted at the increasingly frequent problem of natural disasters.
The Klein/Mahoney bill contains two titles, one to create a National Catastrophe Risk Consortium and one to create a National Homeowners Insurance Stabilization Program. Both programs are intended to help prevent potential bankruptcies and help stabilize the private insurance market, ultimately making catastrophe insurance more available both before and after a major disaster occurs. The Consortium program would allow multiple states to pool their catastrophic risk, thereby hopefully achieving an economy of scale and risk diversity that will lead to a lower cost of reinsurance than states could achieve independently. The Stabilization program would give the Treasury Department the ability to make loans to states and their reinsurance plans in order to ensure continued liquidity in the face of a natural disaster.
Charles E. Symington Jr. the Big “I” senior vice president for government affairs and federal regulations, said “The Big ‘I’ and its 300,000 members nationwide are very pleased that Representatives Klein and Mahoney have introduced this natural disaster legislation. Natural disasters are a national problem that requires a national solution, and we applaud the leadership shown by these members in advancing solutions to this problem.”
John Prible, Big “I” assistant vice president for federal government affairs, agreed with Symington, adding “All Americans are impacted by natural disasters as consumers and taxpayers, and it is crucial that we develop a solution to this growing problem.” Prible noted, “The legislation introduced today by Reps. Klein and Mahoney is a great stop towards a solution, and the Big “I” will continue to work with these members and others to refine their ideas to ensure that any solution will serve consumers and protect taxpayers.”
The Big “I” has possessed one of the biggest advocates of natural disaster solutions, testifying on several occasions before the House Financial Services Committee and the Senate Banking Committee on the need for Congress to consider enacting laws that would stabilize the insurance market for natural disaster risk.
Published on August 6, 2007
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