Washington – Testifying before a hearing of the House Committee on Financial Services Subcommittee on Oversight and Investigation, a representative of the Independent Insurance Agents & Brokers of America (IIABA) pushed for the passage of the Homeowners' Defense Act.
Alex Soto, an independent agent and immediate past board chairman of IIABA, stressed the importance of natural disaster legislation. Introduced in 2007 by Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.), the act is intended to address the growing problem of natural disaster risks.
Soto expressed the association’s gratitude to the House of Representatives for passing the legislation. He also urged the Senate to give the legislation serious consideration, as the proposals could potentially be a part of a comprehensive solution to the problem of natural catastrophe insurance. Soto said that the key to success for any solution is how the private market will react, and whether changes will result in increased coverage.
“We strongly believe our industry must come together with policymakers to find a common solution that will encourage participation in at-risk markets,” said Soto. “We believe the Homeowners Defense Act of 2007 provides a number of provisions that could have a positive impact on the availability and affordability of natural disaster insurance. However, there are important questions associated with these provisions that must be answered.”
Soto pointed out that one strength of the Homeowners’ Defense Act of 2007 is its attempt to encourage greater reinsurance availability for the private market. He also stressed that the goals of the legislation are consistent with the long-standing Big “I” principle that the best solution is for a program to be in place before events happen, and that assistance from the government should be limited.
“Any solutions should have a clear, well-structured mechanism that encourages the private sector to handle as much of the risk as possible, and only trigger federal involvement as a last resort after private market failure,” Soto said. “We believe that it is important to have such a structure in place to protect both consumers and taxpayers living across the country.”
Source: Independent Insurance Agents & Brokers of America
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