WASHINGTON, D.C., July 2, 2009 —The Independent Insurance Agents & Brokers of America (the Big “I”) today submitted testimony to the U.S. House of Representatives Financial Services Committee Subcommittee on Oversight & Investigations field hearing titled “The Homeowners’ Insurance Crisis: Solutions for Homeowners, Communities, and Taxpayers.”
The Big “I” testimony focused on the need for a national solution for natural disaster coverage that protects consumers and utilizes the private markets instead of merely state catastrophe funds. The association sees merit in provisions of the Homeowners Defense Act, which includes a national reinsurance backstop for natural disaster insurance, but also believes there are improvements that can be made.
“The plain truth is that some natural disasters will exceed the financial capacity of state catastrophe funds – only a program that is national in scope will be able to generate enough capacity to cover the most devastating events,” testified the Big “I”.
The IIABA reminded Congress that natural disasters are not just a coastal issue, it’s a national problem.
“Our members live across the country, serving and living in a wide variety of communities – large and small – and so many of them have been impacted by natural disasters. Certainly, the most devastating natural disasters in recent years have resulted from hurricanes, which have had the greatest impact on the homeowners’ insurance market. However, hurricanes are only one of the many catastrophic risks our nation faces. According to the Insurance Information Institute, tornadoes, earthquakes, mudslides, blizzards, and other catastrophe events combined have accounted for over half of the U.S. catastrophe losses in the last 20 years….. Whether it is tornadoes in the Midwest, earthquakes in California, or ice storms in the Northeast, we all face some risk of natural disaster, and it often takes only one or two events in a particular area for the homeowners’ insurance market to be dramatically affected.”
The field hearing, which took place in West Palm Beach, Fla., included testimony from residents, state and federal officials, and insurance carriers.
The hearing examined the insurance industry’s coverage of catastrophic natural disasters, the withdrawal of insurance companies from offering policies in coastal areas, rising homeowners’ insurance premiums and the resulting economic impact on state and local governments, as well as possible solutions to the homeowners’ insurance crisis.
Founded in 1896, IIABA (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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