Information from the Office of Insurance Regulation re McCarty Tours Gulf Coast, Redoubles Efforts for National Cat Plan 2/10/2006
Jan 4, 2007
2/10/06
McCarty Tours Gulf Coast, Redoubles Efforts for National Cat Plan
Tallahassee – Florida Insurance Commissioner Kevin McCarty, who returned Friday from a tour of Gulf Coast areas devastated by Katrina, said he is more convinced than ever the nation, not only Florida, needs a National Catastrophe Plan.
“People have had their lives turned upside down,” said McCarty, who was touring with other top insurance officials in a one-day bus tour of hurricane damage in Alabama, Mississippi and Louisiana.
Insurance commissioners from the three states guided the National Association of Insurance Commissioners (NAIC) group through the damaged areas of their states. McCarty said damage in areas hit by Katrina demonstrate the need for a national plan to deal with the aftermath of large natural disasters from emergency response and financial aspects.
McCarty said the national plan would address not only the financial losses but also emergency response to catastrophes.
“Our citizens deserve the right to be safe,” McCarty said.
McCarty, as chair of the NAIC Catastrophe Insurance Working Group, has been spearheading an initiative to formulate a national plan to be presented at the Spring NAIC meeting in Orlando in March and then presented to legislators in Washington D.C.
The current plan has several layers and is designed to promote personal responsibility among policyholders, support meaningful and reasonable building codes, create incentives to enact mitigation tools, maximize the risk-bearing capacity of private markets and provide quantifiable risk management to the federal government.
The first layer would include a policy that includes coverage for hurricane and earthquake damage along with available flood insurance from the National Flood Insurance Program, encourage loss mitigation and create reserves to cover catastrophic events. The second layer would establish state catastrophe funds for mitigation and enhancements to the building codes and to serve as a conduit to the next national layer. The third layer would contain a national catastrophe insurance mechanism and a National Catastrophe Insurance Commission to coordinate and manage the federal risk expense.