Declarations – East

Flood Insurance Reform

“Since 2006, the GAO has designated the National Flood Insurance Program a high-risk program because of its potential to incur billions in dollars in losses and because the program faces serious financial, structural, and managerial challenges.”

—House Financial Services Committee Chairman Jeb Hensarling, R-Texas, in his Feb. 14 report. He said the committee will monitor the implementation of the Biggert-Waters Flood Insurance Reform Act of 2012, paying particular attention to the reforms that encourage more private sector participation.

A Complex Product

“While the concept of insurance is a simple one, I am not sure there can be a product more complex than insurance.”

—Pennsylvania Insurance Commissioner Michael Consedine’s comment during the Feb. 28 Pennsylvania House appropriation hearing. He told legislators that just as many companies are evolving to adapt to new marketplace forces, insurance regulators must also adapt and change to the increasingly global nature of this business.

To Put It in Perspective

“We expect almost 100,000 [Sandy] claims which – just to put it in perspective – is about double what we saw in Katrina.”

—Liberty Mutual CEO David Long’s comment during an earnings call on March 1. Liberty Mutual had 2012 fourth-quarter loss of $234 million, with the results including $576 million Sandy losses. Still, the insurer reported $829 million profit for the full-year 2012, a 132 percent increase from 2011.