New York, N.Y. - The insurance commissioners of several large states will convene a summit November 15 and November 16 to develop a National Catastrophe Insurance Program, which would more effectively spread insurance risk and help survivors cope with the tremendous financial damage caused by natural catastrophes and acts of terrorism.
The event, already being planned before Hurricane Katrina struck the Gulf Coast, will focus on devising a "single methodology for risk sharing" in the wake of natural disasters and terrorism. It is being organized by California Insurance Commissioner John Garamendi, Florida's Commissioner of the Office of Insurance Regulation, Kevin M. McCarty, and New York's Superintendent of Insurance Howard Mills. Support is being provided by the Director of the Illinois Division of Insurance, Michael McRaith, and the National Association of Insurance Commissioners' (NAIC) Catastrophe Working Group.
Commissioner Garamendi, who has long advocated such a policy, will host the meeting in San Francisco at a location to be determined later. His counterparts from other states and representatives from the insurance industry, Congress, state legislatures and public policy groups will join the effort.
"The ultimate toll of Hurricane Katrina will be unimaginable in both loss of human life and financial ruin," said Commissioner Garamendi. "This tragedy makes our work at the summit even more urgent. As insurers begin to sort through a deluge of claims, and as survivors confront the fact that some losses won't be covered, it will become painfully clear that a single, national policy is the only answer."
Florida's Commissioner McCarty maintains that catastrophes are not isolated geographic events. "Hurricanes, earthquakes, tornadoes, typhoons, floods and wildfires, as well as terrorist events, are national problems that demand a national solution. The current insurance structure is a failed model. Citizens deserve a comprehensive insurance policy that covers all perils and a rational comprehensive national catastrophe plan that protects our citizens from economic ruin," he said.
The goal of the summit is to amass a critical core of support for a single methodology to govern risk-sharing for major catastrophes, including acts of terrorism. Currently, some states, such as California and Florida, have insurance pools to deal with catastrophes particular to their region - earthquakes and hurricanes, respectively. Those programs help make insurance for such events affordable for residents.
Insurance company executives, members of Congress, insurance regulators and other experts will be invited to the San Francisco meeting to debate the pros and cons of creating a National Catastrophe Insurance Program.
Source: New York State Insurance Dept.
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