Geller, McCarty collaborate on joint national catastrophe plan

The officers of two national insurance policymaking groups have announced they will collaborate to create a joint national catastrophe plan. State Senator Steven Geller, D-Hallandale Beach, and Florida Insurance Commissioner Kevin McCarty will present proposals to their respective organizations and ask them to create and finalize a joint plan for adoption.

Sen. Geller chairs the National Conference of Insurance Legislator’s Subcommittee on Natural Disaster Insurance Legislation, and McCarty chairs the National Association of Insurance Commissioner’s Property and Casualty Committee.

“I am pleased to see NCOIL and NAIC working together on an issue of such critical importance to people in this country and to Floridians,” Sen. Geller said. “The ultimate solution for availability and affordability of insurance in disaster prone areas is to have an effective federal program. We are in need of a plan which recognizes that flooding, hurricanes and other natural disasters don’t respect state boundaries.”

“While we are seeing increased interest and support for a national catastrophe plan, we recognize we have much more work to do,” McCarty said. “Our chances for success will be greater if we work together with one plan and use the unique expertise of both organizations to get a program passed to better protect our country.”

The proposals Geller and McCarty will present for joint action include:

• Encouraging states to establish privately funded, tax-exempt catastrophe funds, such as Florida has, and allowing state cat funds to purchase high levels of protection from the federal government for extreme events at actuarially sound prices.
• Allowing insurance companies to accumulate reserves on a tax-deferred basis to respond to natural disasters.
• Establishing a national backstop for mega-catastrophes over $50 million, similar to the federal Terrorism Risk Insurance Act.
• Changing IRS tax policy to allow insurers to accumulate tax deferred reserves to be dedicated solely to paying for catastrophe claims.
• Create a framework for prompt redevelopment after a disaster.
• Instilling a culture-of-preparedness among the U.S. population.