WASHINGTON, D.C., Sept. 26, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) applauds House Financial Services Chairman Barney Frank (D-Ma.) and other members of the Committee for approving the Homeowners' Defense Act of 2007, intended to address the growing problem of natural disasters.
The bill introduced by Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.) contains two titles, one to create a National Catastrophe Risk Consortium and one to create a National Homeowners Insurance Stabilization Program. Both programs are intended to help prevent potential insolvencies and make the private insurance market more stable, ultimately making catastrophe insurance more available before and after a major disaster. The Consortium program would allow multiple states to pool their catastrophic risk, thereby hopefully achieving an economy of scale and risk diversity that will lead to a lower cost of reinsurance than states could achieve independently. The Stabilization program would allow the Treasury Department to make loans to states and their reinsurance plans to ensure their continued liquidity in the result of a natural catastrophe.
“The Big ‘I’ is pleased that the Committee has approved this natural disaster legislation,” says Charles E. Symington, Jr., Big “I” senior vice president of government affairs and federal relations. “Natural disasters require a national solution, and we applaud the leadership shown by the Committee in advancing solutions to this problem. The legislation introduced by Reps. Klein and Mahoney and approved today is a great first step towards a comprehensive solution.”
The Big “I” has been a leader in advocating for natural disaster solutions, testifying on several occasions before the House Financial Services Committee and the Senate Banking Committee on the need for Congress to consider legislation to stabilize the insurance market for natural disaster risk.
“As the representatives of the independent insurance agents who sell homeowners’ insurance, we feel it is important that Congress encourages both a healthy and vibrant private market as well as secure state and regional reinsurance programs, and it is our view that this legislation does both” says John Prible, Big “I” assistant vice president for federal government affairs. “Specifically, the creation of a National Catastrophe Risk Consortium could offer both states and private market participants an opportunity to benefit from a pooling of catastrophic risk diversified by type of peril and geographic region. The creation of a National Homeowners’ Insurance Stabilization Program, meanwhile, could provide for a level of stability for state and regional reinsurance programs that is absent at this time.“
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.