Donelon, Fellow Commissioners Tackle Coastal Insurance Issues at Public Hearing
Released: September 25, 2007
Commissioner of Insurance Jim Donelon and state regulators from Alabama, Florida, Mississippi, South Carolina, Arkansas and the Virgin Islands participated in a forum yesterday on the insurance issues affecting hurricane prone states.
The event, sponsored by the National Association of Insurance Commissioners (NAIC), was held in Mobile, Alabama.
Donelon and his fellow commissioners heard from insurance company and reinsurance representatives along with members of Congress who discussed their ideas to improve the availability and affordability of insurance on the Gulf Coast. "We are open to all solutions," said Commissioner Donelon. "We hope these will come from the private sector but we will need a federal solution as well."
Arkansas Commissioner Julie Benafield Bowman said she was taking part in the forum because the "coastal insurance issue is a national issue, not just an issue for one state."
Ideas offered by private insurance companies included: the adoption and enforcement of modern statewide building codes nationwide as has been done in Louisiana; the modernization of the federal flood insurance program; the establishment of state catastrophe funds in disaster prone states in connection with the creation of a federal backstop for those state cat funds. Insurance company representatives said they face coastal hurricane challenges from Texas to Maine.
Congressmen Jo Bonner of Alabama and Tim Mahoney of Florida said lawmakers on Capitol Hill are working on possible solutions through legislation that would include a voluntary federal and state partnership where states would pool their catastrophic risk and be eligible for low interest federal loans if disaster losses exceeded private insurance or state cat fund capacity.
Donelon said he will continue his push for a federal catastrophe fund and urge his fellow commissioners to hold future public meetings to carry on with the discussion of ideas and solutions for the insurance issues affecting the coastal states.