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NCOIL to Debate Natural Catastrophe Resolution

On November 15, the National Conference of Legislators' (NCOIL) Subcommittee on Natural Disaster Insurance Legislation will consider a proposed Resolution Regarding a New Approach to...
November 6, 2007

On November 15, the National Conference of Legislators' (NCOIL) Subcommittee on Natural Disaster Insurance Legislation will consider a proposed Resolution Regarding a New Approach to State Catastrophe Funds and Federal Mega-Disaster Assistance, sponsored by Senator Steven Geller (FL). The resolution recognizes the wide-ranging impacts of natural mega-disasters and reaffirms NCOIL support for strong building codes and land-use policies, state catastrophe funds when needed, and IRS allowance of tax-deferred catastrophe reserves. 

The resolution, while commending congressional interest in the issue, urges more immediate action and supports creation of a new system in which optional state catastrophe funds would serve as pass-through mechanisms for federal assistance.  Under the resolution, the Treasury would provide federal monies to a catastrophe fund when insured losses in a state exceed its direct written premiums.  The state catastrophe fund would then reimburse the Treasury interest-free over the course of 20 years.

PIA National supports the creation of a national natural catastrophe plan and will continue to work with both NCOIL and NAIC on this issue.  PIA's Natural Catastrophe Working Group, along with our Regulatory Affairs and Federal Affairs Committees have been closely monitoring the discussions at the NAIC and NCOIL and providing comments.  PIA's Natural Catastrophe Working Group has unanimously endorsed allowing insurance companies to build up tax-free reserves to be used to pay disaster related claims.

The Subcommittee will also hear an update on pending state and federal initiatives, discuss climate change issues and report on NAIC activity.