WASHINGTON, D.C., September 6, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest insurance association, testified today before a joint hearing of the House Committee on Financial Services Subcommittee on Housing and Community Opportunity, and the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises to discuss H.R. 3355 , the Homeowners' Defense Act of 2007.
Steve Spiro, an independent agent and President of Spiro Risk Management Inc., in Valley Stream, New York, testified on the importance of natural disaster legislation. On behalf of the Big “I”, the only producer trade association testifying at the hearing, he thanked Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.) for introducing the Homeowners' Defense Act, intended to address the growing problem of natural disasters risks.
Spiro expressed the Big “I”’s belief that the bill deserves serious consideration and that these proposals could potentially be a part of a comprehensive solution to the problem of natural catastrophe insurance. He pointed out that the key to the success of any solution is how the private market will react and whether it will result in increased coverage.
“We strongly believe our industry must come together with policymakers to find a common solution that will encourage participation in at-risk markets,” said Spiro. “We believe the Homeowners Defense Act of 2007 provides a number of provisions that could have a positive impact on the availability and affordability of natural disaster insurance. However, there are important questions associated with these provisions that must be answered.”
Spiro pointed out that one strength of the Homeowners’ Defense Act of 2007 lies in its attempt to have a plan in place to encourage greater availability of reinsurance for the private markets. Spiro stressed that the goals of the legislation are consistent with the Big “I”’s long-standing principle that the best solution is for a program to be in place before the events happen and assistance from the government should be limited.
“Any solutions should have a clear, well-structured mechanism that encourages the private sector to handle as much of the risk as possible, and only trigger federal involvement as a last resort upon private marketplace failure.” said Spiro. “We believe that it is important to have such a structure in place to protect both consumers and taxpayers living in all areas across the country.”
Finally, Spiro reiterated the Big “I”’s desire for the insurance industry to come to a consensus to find a solution to the catastrophe insurance availability crisis. He also praised the Committee along with Rep’s Klein and Mahoney, as well as Rep. Ginny Browne-Waite (R-Fla.) and Rep. Bobby Jindal (R-La.) for taking the lead, bringing forward proposals and working together to find the answer.
“The Big “I” is committed to an open dialogue with all interested parties in the public and private sectors to address these important issues that consumers face. We stand ready to assist your efforts in any way we can,” said Spiro.
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.