After issuing a formal white paper on the subject last week, Travelers Companies Inc. also issued a request—to let an independent federal commission regulate rates for hurricane wind coverage.
The report was distributed at the Southeastern Commissioners’ Conference “Catastrophe Preparedness & Insurance Forum” in Biloxi, Miss., last week, where Brian MacLean, Travelers president and COO, outlined the detailed set of principles designed to provide the private market with a solution to the coastal insurance crisis.
MacLean presented the plan to Mississippi Gov. Haley Barbour and four state insurance commissioners at the meeting. Currently, the authority for such rate regulation is held at the state level.
Federal oversight of personal lines homeowner rates in four U.S. coastal zones, including 18 states from Maine to Texas, could create a more stable market for insurers and homeowners than state-by-state regulation, MacLean claimed. The company's proposal would require congressional approval, but, according to MacLean, that doesn’t mean it would require taxpayer subsidies, reported the Associated Press.
"At the end of the day, what we want is a viable insurance market," MacLean said. "We're not looking to limit our marketplace. We're looking to figure out how we can grow."
Barbour responded to the plan, stating it was a "work in progress." Further, he admitted that he is interested it the plan as a way to possibly boost the availability of affordable insurance in coastal areas.
"We coastal state governors have come to a conclusion that Congress is not going to pass a federal law to deal with the problems we face concerning property and casualty insurance," Barbour said in an interview reported by AP. "So we're going to consider whether a regional approach is feasible."
Travelers says to address the ongoing wind versus flood debate that has tied up claims adjudication for most larger storms, its proposed regulatory changes would apply specifically to homeowner policies' wind coverage for "named storms," while states would continue to regulate "all other perils."
At the meeting, insurance commissioners from Alabama, Louisiana, Mississippi and South Carolina asked MaClean for more details about the plan, expressing concern about the plan’s implications.
Louisiana Insurance Commissioner Jim Donelon said he is open to "federal intervention" to help ease any shortage of affordable insurance on the coast, but did not agree to ceding too much authority to the federal government. “It would have to be overhauled before I could see myself supporting it. Tweaked would not do it."
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access