WASHINGTON, D.C., Nov. 6, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) applauds Senators Hillary Clinton (D-N.Y.) and Bill Nelson (D-Fla.) for introducing the Homeowners' Defense Act of 2007, intended to address the growing problem of the availability and affordability of natural disaster insurance.
The legislation introduced by Sens. Clinton and Nelson is companion legislation to H.R. 3355, introduced earlier this year by Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.). The proposal 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 aftermath of a natural catastrophe.
“The Big ‘I’ is pleased that Senators Clinton and Nelson have introduced this legislation aimed at easing the natural disaster insurance crisis facing many communities,” says Charles E. Symington, Jr., Big “I” senior vice president of government affairs and federal relations. “Natural disaster risk requires a national solution, and we applaud the Senators for advancing a proposal to attempt to solve this problem. Introduction of this legislation in the Senate, coupled with expected House action on the issue this week, is focusing attention on the severity of the problem. The Big ‘I’ thanks Senators Clinton and Nelson for proposing a concrete 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 are grateful to Senators Clinton and Nelson for their leadership in advancing an idea that could encourage both a healthy and vibrant private market as well as secure state and regional reinsurance programs,” 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 currently absent.“
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.