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Big "I" Testifies Natural Disaster Legislation Needed


Association calls for “national solution to national problem”


WASHINGTON, D.C., Sept. 13, 2006—The Independent Insurance Agents & Brokers of America (the Big “I”) testified today before a subcommittee of the House Financial Services Committee on the crucial need for natural disaster legislation.


J. David Daniel, president of Daniel & Eustis Insurance in Baton Rouge, La., and a member of the Big “I” Executive Committee, represented the association before the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. Daniel testified that there needs to be a federal role in natural disaster preparation, and that Congressional attention is needed for several pieces of legislation that have been introduced to deal with this issue.


“Put simply, insuring against natural disasters is a national problem that requires a national solution,” Daniel testified. “Despite our longstanding position that the insurance market is best served by limited federal involvement, we believe that a federal solution is necessary to help provide capacity and fill a void that the private market cannot and will not service. However, it is important that the day-to-day regulation of insurance remain at the state level, where state insurance departments are best equipped to serve the special needs of local consumers in local markets.”


Daniel noted Big “I” support for H.R. 846, the Homeowners’ Insurance Availability Act, introduced in 2005 by Rep. Ginny Brown-Waite (R-Fla.). Her bill would allow private insurers to purchase, at auction, reinsurance contracts directly from the U.S. Treasury to cover natural disasters that are equal to, or greater than, a 1-in-100-year event.


“We believe this is a strong proposal,” Daniel testified, “because it will encourage more companies to enter at-risk markets, thus increasing availability and market stability, while limiting federal involvement to only the most devastating catastrophes.”


Daniel also mentioned other pieces of pending natural-disaster legislation, including the following bills:


  • H.R. 2668, the Policyholder Disaster Protection Act, introduced by Rep. Mark Foley (R-Fla). This bill would permit insurers to create tax-free reserve funds for natural disaster claims.
  • H.R. 4836, Catastrophic Savings Account Act, introduced by Rep. Tom Feeney (R-Fla.). This bill would create tax-free, personal catastrophic savings accounts.
  • H.R. 4366, the Homeowners Insurance Protection Act of 2005, introduced by Reps. Ginny Brown-Waite (R-Fla.) and Clay Shaw (R-Fla.). This bill would make state catastrophe funds eligible for federal reinsurance.
  • H.R. 4507, the Natural Catastrophe Insurance Act of 2005, offered by Rep. Carolyn Maloney (D-N.Y.). This bill would establish a federal program to provide reinsurance for state natural disaster insurance programs.
  • H.R. 5891, the Catastrophic Risk and Insurance Commission Act, introduced by Reps. Debbie Wasserman Schultz (D-Fla.), Mike Castle (R-Del.), Patrick McHenry (R-N.C.) and Charlie Melancon (D-La.). This bill would help Congress address ways to reduce the costs of disasters by establishing a national commission to examine proposals and make recommendations to assist the federal government in preparing for and managing natural disasters.


“Our members support exploring ways to reduce the costs of disasters, such as mitigation

efforts, Daniel said. “For instance, enhancing building codes and using financial incentives to mitigate risk are among proposals worth exploring in order to protect both consumers and taxpayers across the country.”


Daniel stressed that, despite the Gulf coast hurricanes getting most of the attention in 2005, natural disasters affect all areas of the country, which means that national solutions are required for a national issue. And natural disasters affect every single taxpayer in the nation, no matter where they live.


“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,” Daniel testified. “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. 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.”


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:




​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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