WASHINGTON, D.C., February 14, 2008— The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest insurance association, testified Monday before a hearing of the House Committee on Financial Services Subcommittee on Oversight and Investigation to discuss the homeowners' insurance crisis and its impact on communities, homeowners and the economy.
Alex Soto, an independent agent and Immediate Past Chairman of the Board of IIABA, 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 disaster risks.
Soto expressed the association’s gratitude to the House of Representatives for passing the legislation. He also urged the Senate to give the legislation serious consideration, as the proposals could potentially be a part of a comprehensive solution for the problem of natural catastrophe insurance. He pointed out that the key to success for any solution is how the private market will react and whether changes 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 Soto. “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.”
Soto 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 reinsurance availability for the private market. Soto stressed that the goals of the legislation are consistent with the long-standing Big “I” principle that the best solution is for a program to be in place before events happen, and that 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 after private market failure,” said Soto. “We believe that it is important to have such a structure in place to protect both consumers and taxpayers living across the country.”
Finally, Soto reiterated the association’s desire for the insurance industry to come to a consensus on a solution to the catastrophe insurance availability crisis. He also praised the Committee, along with Reps. Klein and Mahoney and Rep. Ginny Browne-Waite (R-Fla.) 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,” said Soto. “We stand ready to assist your efforts in any way we can.”
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.