BIG “I” TESTIFIES AT NCOIL MEETING
Soto Discusses Disaster Insurance, NFIP, Mitigation Possibilities
WASHINGTON, D.C., Nov. 21—The Independent Insurance Agents & Brokers of America’s President-Elect Alex Soto, CPCU, ARM, of Miami, Fla. based InSource, Inc. testified on a panel entitled Recovering from Katrina and Rita: Exploring the Profound Consequencesat the annual meeting of the National Conference of Insurance Legislators’ (NCOIL) on Nov. 19.
Soto, representing agents and brokers in the roundtable discussion, was joined on the panel by representatives from all segments of the industry. The panel explored many of the issues and questions that have been raised in the wake of Hurricanes Katrina, Rita, and Wilma, including the effect of these storms on the insurance marketplace, the ability of the private insurance market to cover future catastrophic losses, the possible role of the federal government in bolstering capacity, the importance of mitigation efforts in advance of storms, and the state of the National Flood Insurance Program.
Soto addressed the nation’s preparedness and the insurance industry’s capability to respond to future mega-catastrophes. “We are not seriously attacking these issues today, and we need to get a collective backbone,” said Soto. “Now is the time to act.”
The Big "I" urged the industry and policymakers to identify ways to be better prepared for the inevitability of future disasters and to improve existing mechanisms. “What we have now is not working, and there is a need and a proper place for federal involvement,” said Soto. “We need more homeowners participating in catastrophe insurance programs like the California Earthquake Authority, and we need more companies writing policies that will protect consumers when disasters strike.”
Soto noted that Florida sells more flood insurance than the next ten states combined, and echoed earlier calls from the Big “I” for reform of the National Flood Insurance Program. “The flood insurance program needs to be modernized,” said Soto. “The coverages available today are not sufficient, and the policy is archaic. We also have got to find ways to get more people into the flood program.”
The Big "I" continues to urge legislators to take action on mitigation proposals, such as building codes and inspection systems. He noted that Hurricane Wilma, which was a Category 1 storm when it passed through South Florida, did tremendous damage and explained that the coastline is not prepared for more powerful storms. Wilma, as a relatively minor storm, created a host of infrastructure problems in South Florida, knocking out the electrical system for over a week in many places. Business interruption was a major problem as a result.
“We need to get serious about mitigation and building codes immediately. We have far too many people building and rebuilding in irresponsible areas and in irresponsible ways.” He also talked about the need to encourage and promote retrofitting of existing homes.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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