FOR IMMEDIATE RELEASE

NAIC TESTIFIES BEFORE CONGRESS ON STABILIZING COASTAL INSURANCE MARKETS

KANSAS CITY, MO (Sept. 13, 2006) – Speaking today on behalf of the National Association of Insurance Commissioners (NAIC), Kevin McCarty, Florida Insurance Commissioner, testified before a key subcommittee of the House of Representatives on the role of insurance regulators in stabilizing the coastal insurance market. McCarty commended the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises for holding the hearing to examine the current state of the market following recent devastating storm seasons.

“Coastal insurance markets bore the brunt of hurricanes Katrina and Rita, but the threat of mega-catastrophes looms large in nearly every state,” said McCarty, who chairs the NAIC’s Catastrophe Insurance Working Group. “Solutions to how our country copes with these catastrophes need to focus on pre-event steps we can take now to reduce losses in the future.”

McCarty’s testimony highlighted the factors causing the dramatic increases in homeowners’ insurance costs, particularly in the coastal regions. The testimony discussed insurance availability and state mechanisms designed to provide stability in coastal regions, such as wind pools, catastrophe funds and effective building codes. McCarty also outlined some of the concepts being considered by the NAIC’s National Catastrophe Plan, including tax-deferred catastrophe reserves, state catastrophe funds, and a federal catastrophe backstop. His testimony also outlined a resolution passed during the NAIC’s Summer National Meeting that calls on Congress to consider these and other measures for dealing with natural disasters.

“Whether you live on a coastline or a fault line, the cost of insurance is likely to increase as insurers and reinsurers begin to fully realize the catastrophic potential in this country. We need to act now so that insurance is available and affordable regardless of where one lives,” said McCarty.

Testimony: Stabilizing Insurance Markets for Coastal Consumers (PDF)

About the NAIC

Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm

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