FOR IMMEDIATE RELEASE

NAIC TESTIFIES BEFORE U.S. HOUSE
ON NATURAL DISASTER INSURANCE

WASHINGTON, D.C. (March 27, 2007) — Speaking today on behalf of the National Association of Insurance Commissioners (NAIC), Florida Insurance Commissioner Kevin McCarty testified before a key subcommittee of the U.S. House of Representatives on the role of insurance in preparing for large natural catastrophes.

McCarty commended the Subcommittee on Housing and Community Opportunity of the House Committee of Financial Services for holding the hearing and examining the issue of natural catastrophe preparation and response.  

“Large natural catastrophes are a national economic problem, not simply a local insurance problem,” said McCarty, who chairs the NAIC’s Catastrophe Insurance Working Group. “Congress and the states need to work together to develop a comprehensive plan today to better manage and mitigate the natural catastrophic events of tomorrow.”

He said although insurance will always be the catalyst of economic recovery following natural catastrophes, much can and should be done prior to these events to minimize their impact. Effective and enforced building codes, mitigation incentives and better land use policies are all steps to managing our national response to natural catastrophes, McCarty told the subcommittee. 

His testimony outlined the challenges of insuring catastrophic risk and detailed some of the solutions under consideration by the states and Congress. Given the complexity of the problem and the variety of approaches to resolving it, McCarty also called on Congress to create a National Commission on Catastrophe Preparation to further study the issues, weigh the alternatives and focus the debate.  

“Hurricane Katrina may have been the cause of the national attention on this issue, but as that tragic day moves further into history, we still have no comprehensive national approach to managing catastrophes of that magnitude,” McCarty said. “Thankfully, 2006 was a relatively calm year for property and casualty insurers. But this window of opportunity to act is merely the eye of the storm, and we need to take advantage of it.”

Click HERE to view the entire testimony.

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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