Catastrophe Insurance (C) Working Group
March 29, 2008

The Catastrophe Insurance (C) Working Group met on March 29 2008 to discuss its white paper and to learn about the My Safe Florida Home Program and recent federal legislation. During the meeting, the Working Group:

• Learned about the creation of the My Safe Florida Home Program. After the 2004 and 2005 hurricanes inflicted over $33 billion in damages on Florida citizens, the Florida Legislature created the My Safe Florida Home Program. It was designed to help Floridians better protect their property; and save money on insurance premiums. The goals was to provide free inspections to 400,000 homes and provide matching grants up to $5,000 to 35,000 Floridians to encourage them to mitigate against hurricane losses. Funded by a $250,000 appropriation that was available from a sales tax windfall that occurred with the building boom following the 2004 and 2005 hurricanes, the program is to sunset in June 2009.

• Learned of a wind engineering research project called the RenaissanceRe Wall of Wind. This project replicates a full scale hurricane by subjecting actual structures to severe wind and rain conditions in a laboratory setting to test construction designs, building materials and construction techniques to building construction and retrofitting practices.

• Received an update on various federal legislative proposals related to natural disasters. The Working Group learned that the National Flood Insurance Program would sunset in the fall of 2008 and requires Congressional action to extend the program. Proposals have been considered to do that along with some program enhancements such as adding the wind peril and increasing the coverage available from the NFIP. In addition, there are bills proposing mitigation assistance and to establish a blue ribbon panel to discuss the federal government’s role in managing the aftermath of natural disasters.

• Learned about the NAIC’s involvement in the FBIIC. Led by the Treasury, FBIIC is the group that monitors and stress-tests the financial markets to be sure they are prepared to provide services to the public following a disaster. Recent FBIIC activities include a pandemic flu exercise and regional exercises intended to test regional abilities to react to a Cat 2 hurricane.

• Discussed its white paper Natural Catastrophe Risk: Creating a Comprehensive National Plan and decided that it was not ready to be adopted. Several Working Group members requested additional time to improve the white paper. The Working Group decided that it would hold either an interim meeting or an extended meeting during the NAIC 2008 Summer National Meeting to finish work on the paper.

Action Items