WASHINGTON, D.C., Nov. 9, 2007— Yesterday, the House of Representatives passed H.R. 3355, the Homeowners' Defense Act of 2007. The bill, sponsored by Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.), would address the growing problem of natural disasters.
“The current dysfunction in the natural disaster insurance market requires Congressional action, and passage of the Klein-Mahoney bill is a great first step towards a comprehensive solution,” says Charles E. Symington, Jr., Big “I” senior vice president of government affairs and federal relations. “We applaud Chairman Frank for working to get this done in the House.”
The bill 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 to 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, with the goal of 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 aftermath of a natural catastrophe.
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 and advise consumers on 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 takes a step toward both,” says John Prible,” Big “I” assistant vice president for federal government affairs.
Reps. Klein and Brown-Waite (R-Fla.) offered an amendment that passed the House that would add a national reinsurance backstop for state catastrophe funds. “The Big ‘I’ supports Congressional consideration of a national reinsurance backstop for natural disaster risk, and we look forward to working with House and Senate leadership on perfecting a backstop mechanism to best serve consumers,” says Symington.
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.