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FOR IMMEDIATE RELEASE
NAIC COMMENDS SENATE COMMITTEE FOR SUPPORT OF FLOOD CLAIMS MEDIATION Mediation Reinforces State Efforts To Help
KANSAS CITY, MO - (May 25, 2006) - The National Association of Insurance Commissioners (NAIC) is applauding action by the Senate Banking Committee today that reinforces and supports state efforts to help insurance policyholders resolve insurance disputes following a catastrophe. The Committee approved legislation reforming the National Flood Insurance Program (NFIP) on May 25, 2006, that requires NFIP to participate in state non-binding mediation programs.
“We commend the Senate Banking Committee’s support of non-binding mediation. The mediation process offers policyholders a proven and cost-effective solution to resolve flood insurance claims more quickly and without costly litigation,” said Kevin McCarty, Chair of the NAIC Property and Casualty Committee and Florida Commissioner of Insurance Regulation.
The Senate Banking Committee vote echoes the approval of similar mediation language by the House Financial Services Committee on March 15. That language, included as a bi-partisan amendment offered by Rep. Debbie Wasserman-Schultz (D-FL) and Rep. Ginny Brown-Waite (R-FL), was endorsed after detailing the 92% success rate of the mediation program implemented by Florida following the 2004 hurricane season. The Florida mediation model offered policyholders an innovative way to settle disputed claims, and was used by Florida, Louisiana, and Mississippi with similar success during the 2005 hurricane season. The one drawback to the program has been the lack of participation by the NFIP.
“Today the Senate put policyholders first. As state insurance commissioners help consumers recover from the 2005 hurricane season and prepare for all future disasters, we welcome participation by FEMA officials in our programs and look forward to the increased efficiencies and cost-savings that will benefit both insurance policyholders and the federal government,” said George Dale, Mississippi Insurance Commissioner.
Insurance companies and policyholders have a strong self-interest in sitting down with all of the relevant parties to settle claims quickly outside the expensive and time-consuming litigation process. Those who are not satisfied with the process—either policyholders or insurers—retain their right to go to court, but the exceedingly high success rate of the mediation process demonstrates that most parties prefer a speedy and efficient alternative for reaching a good faith settlement.
The NAIC urges swift Congressional approval of flood insurance reform legislation that includes this important mediation language.
About the NAIC 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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