Friday, July 30, 2010
| Make Florida More Hurricane-Resistant
published: Sep 28, 2009
by: Eli Lehrer and John Hallman
As hurricane-ridden September passes by, much of the news in Florida appears good: Hurricanes, so far, have stayed away from U.S. coastlines, the Legislature has passed a few common-sense reforms to the state's property insurance system and state CFO Alex Sink says that the state's troubled Hurricane Catastrophe Fund (Cat Fund) has gained a firmer fiscal footing. more... |
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| A catastrophe waiting to happen
published: Sep 15, 2009
by: Jonathan Orszag
This month marks the fourth anniversary of Hurricane Katrina. That raises a simple question: Are we prepared as a Nation for the next mega-catastrophe (one, perhaps, worse than Katrina) that will inevitably strike our country? more... |
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| The Meltdown Next Time: The financial danger nobody knows about.
published: Sep 12, 2009
by: Eli Lehrer
When the insurance giant American International Group was threatened with collapse in late 2008, its credit default swap business and other international operations were cited as the heart of its troubles. But the largest consequence of AIG's uncontrolled failure on consumers' pocketbooks could have come from the domino-like collapse of its businesses writing insurance on boats, cars, homes, lives, and just about everything else. If these businesses fell apart as a result of AIG's overall collapse, the argument went, the contagion could have brought a collapse of everything from retirement savings plans to auto insurance claims payments from companies unconnected to AIG. (In theory, the operations were firewalled from AIG's other operations, but the extremely slow rate at which they've found buyers indicates that many had significant exposure to the company's other woes.) more... |
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New federal legislation would give South Florida homeowners an insurance break |
by: Julie Patel and William E. Gibson / Sun-Sentinel
published: May 21, 2009
South Florida homeowners could get a break from soaring property insurance premiums under legislation introduced in Congress Thursday that would expand the federal government's role in supporting state-backed catastrophe coverage.
The Homeowners Defense Act is backed by most lawmakers representing Florida.
Rep. Tom Rooney, R-Tequesta, said the legislation (H.R. 2555), along with the Policy Holder Disaster Protection Act (H.R. 998) he introduced earlier this year, will help to protect homeowners from skyrocketing costs.
''We can no longer afford to stand by while the cost of property insurance escalates to record levels and insurers continue to leave Florida,'' Rooney said. ''With hurricane season right around the corner we are reminded of the urgent need for common sense solutions to the insurance crisis we face today.''
Rep. Ron Klein, D- Boca Raton, said the bill would essentially solve the state's property insurance crisis. But insurance industry officials say Klein's bill would interfere with the private market and force American taxpayers to subsidize risky development in catastrophe-prone places.
''Floridians need relief in the form of the affordability and accessibility to homeowner insurance,'' said Klein. ''The last 10 to 15 years they've been paying more and more for less and less coverage and in many cases, their companies have pulled out altogether.''
Klein co-sponsored a version of the bill last year that passed the House but met resistance from the Bush administration. But the odds for passage are better this year because President Barack Obama supports the bill's concept and Democrats have majority control of Congress.
The bill would allow qualified states to buy backup coverage from the federal government for rare disasters. States would also be able to apply for federal guarantees of bonds to help state insurance funds pay catastrophe claims and pool their risk with other states to buy backup coverage.
Klein said such efforts would reduce the amount of federal emergency aid needed after disasters and reduce the risk of state-backed Citizens Property Insurance, Florida's largest property insurer with 1 million policies, and the Florida Hurricane Catastrophe Fund, which sells backup coverage to insurers. All automobile and property insurance policyholders pay fees to offset deficits in state insurance programs.
The American Insurance Association, which represents 350 property-casualty insurers, opposes the measure, arguing it would make the federal government an insurance provider and supplant what's already available in the private market. Insurance industry representatives say the bill could hit roadblocks in the Senate.
The Senate version of the legislation was introduced by Florida Democrat Bill Nelson, and Florida Republican Mel Martinez is a co-sponsor.Other measures targeting property insurance this year include a bill that would expand the National Flood Insurance Program to include hurricane coverage and legislation to create a federal insurance regulator as an alternative to state regulation.
Staff writer Jim Turner contributed to this report.
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