For
Immediate Release
NAIC COMMENDS HOUSE
COMMITTEE FOR
SUPPORT OF FLOOD
CLAIMS MEDIATION
Amendment Reinforces State Efforts To Help
Insurance Policyholders
KANSAS CITY, MO - (March 16, 2006) - The National
Association of Insurance Commissioners (NAIC) is applauding action
by a Congressional Committee today that reinforces and supports
state efforts to help insurance policyholders resolve insurance
disputes following a catastrophe. The U.S. House Financial Services
Committee unanimously approved an amendment to the National Flood
Insurance Program (NFIP) reform legislation on March 15, 2006, that
requires NFIP to participate in state non-binding mediation
programs.
"We commend the House Financial Services Committee’s support of
non-binding mediation. Allowing this process means that thousands of
hurricane and flood victims can make use of this 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.
In a March 10 letter to Chairman Michael Oxley (R-OH) and Ranking
Member Barney Frank (D-MA), the NAIC detailed the proven success
record of these programs. In 2004, after four hurricanes, Florida
executed an innovative mediation program with a 92 percent success
rate in settling disputed claims. Florida, Alabama,
Mississippi and Louisiana successfully implemented the Florida model
to mediate claims with state-regulated private insurers during the
2005 hurricane season, but have been unable to obtain NFIP
participation.
“As state insurance commissioners help policyholders 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.
The NAIC expressed special gratitude for the efforts of Rep.
Debbie Wasserman-Shultz (D-FL) and Rep. Ginny Brown-Waite (R-FL),
who sponsored the bipartisan amendment, which promises to be very
beneficial to flood victims seeking restitution. The NAIC also
thanked Rep. Richard Baker (R-LA) and Rep. Frank for their outspoken
support for the amendment.
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 very important amendment
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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