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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American Insurance Association supports pre-disaster mitigation funding |
published: May 22, 2009
Leigh Ann Pusey, president of the American Insurance Association (AIA) this week expressed support for legislation introduced that would grant additional pre-disaster mitigation funding to local and state authorities to provide resources for enactment and enforcement of state-wide building codes.
''Every year following a natural disaster, the federal government and the private sector invest billions of dollars in disaster relief to rebuild communities,'' said Pusey. ''By taking action before the catastrophe, homeowners, federal and state governments can mitigate losses with the adoption and enforcement of building codes.''
Introduced by Rep. Lincoln Diaz-Balart (R-FL) and Rep. Michael Arcuri (D-NY), H.R. 2592 improves upon the current mitigation programs in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). First, in the Hazard Mitigation Grant Program (HMGP), states that adopt and enforce state wide building codes would be eligible to receive additional funding from the HMGP after a disaster occurs. Secondly, it amends the Pre-Disaster Mitigation Grant Program (PDM) to allow states to use PDM funds to building code enforcement programs prior to a disaster.
Pusey voiced concerns, however, over different legislation that was introduced by Rep. Ron Klein (D-FL), entitled the Homeowners' Defense Act of 2009. The legislation would establish a National Catastrophe Risk Consortium and create federal bailout for inadequate state catastrophe funds.
''While well intentioned, the bill falls short in trying to address the problems in coastal insurance markets. It will not generate new capacity, reduce the cost or improve the availability of homeowners' insurance,'' said Pusey. ''In fact, it is likely to encourage states to create thinly financed, state-run reinsurance facilities that will displace the private market and require a federal government bail-out in the event of a catastrophe.''
''The private insurance system continues to be well-positioned to manage natural catastrophe risk, and the best course is to improve, not displace, the private sector's ability to serve homeowners and businesses that could face losses from natural catastrophes,'' concluded Pusey.
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