REP. KLEIN INTRODUCES NATURAL DISASTER LEGISLATION
Bill will help spur debate on growing issue
Rep. Ron Klein (D-Fla.) introduced in late May H.R. 2555, the Homeowners’ Defense Act. The legislation addresses the growing problem of natural disasters.
“Natural disasters require a national solution and the introduction of the Klein bill is a good first step towards a comprehensive solution,” says Charles E. Symington, Jr., Big “I” senior vice president of government affairs. “We applaud the Congressman for working to get this introduced in the House.”
The bill contains four main provisions and creates the following:
1. National Catastrophe Risk Consortium
2. Catastrophe Obligation Guarantee Program
3. Federal Natural Catastrophe Reinsurance Fund
4. Mitigation Grant Program
Each program is intended to help prevent potential insolvencies and to make the private insurance market more stable, ultimately making catastrophe insurance more available before and after a major disaster.
The National Catastrophe Risk Consortium program would allow multiple states to pool their catastrophic risk, with the goal of achieving an economy of scale and risk diversity that will lead to a lower cost of reinsurance than states could achieve independently. The Catastrophe Obligation Guarantee Program would authorize the federal government to guarantee debt issued by eligible state catastrophe programs to assist in the financial recovery from natural catastrophes. The Federal Reinsurance Fund would allow the Treasury Department to write reinsurance contracts covering truly catastrophic–level events. Finally, the Mitigation Grant Program would establish a grant program in the Treasury Department to develop, enhance, and maintain programs that prevent and mitigate losses from natural catastrophes.
The Big “I” supports the goals of each of these programs, but also encourages Congress to consider making changes to the Reinsurance title of the legislation in particular.
“While the Big “I” appreciates Congress’ consideration of a national reinsurance backstop for natural disaster insurance, we feel that such a backstop would better encourage private market participation in problematic markets if it allowed private market participation instead of just state catastrophe funds,” continued Symington. “We will continue to advocate that Congress consider a solution utilizing the private markets instead of merely state catastrophe funds.”
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 feel it is important that Congress encourages 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 Catastrophe Obligation Guarantee Program, meanwhile, could provide for a level of stability for state and regional reinsurance programs that is absent at this time.“
BACK TO TOP
HURRICANE DEDUCTIBLE LEGISLATION REACHES GOVERNOR
Legislation introduced in the current session of the General Assembly clarifying the application of hurricanes has reached the Governor for action. The bill, H5275 sub A, would require losses due to hurricane must be a result of sustained hurricane force winds as reported by the National Weather Service for Block Island. Additionally it provides that for the rest of the state, the sustained winds as reported by the National Weather Service for any other location.
IIARI has been in support of the legislation as it would ensure uniform application of deductibles and eliminate any ambiguities in the interpretation of the deductible application.
Click here to view H5275 Sub A.
BACK TO TOP
DBR ACTIVITY
The Insurance Division of the Department of Business Regulation recently issued Insurance Bulletin Number 2009-6 addressing non-compliant insurers for emergency contact.
Click here to see Insurance Bulletin Number 2009-6.
BACK TO TOP
YOUNG AGENTS EVENT – Thursday, June 18
It’s not too late to join other IIARI Young Agents at the Second Annual Billiards Night on Thursday, June 18, at Boston Billiards Club, 33 Lambert Lind Highway in Warwick. The evening will include plenty of billiards and a delicious Italian Buffet Dinner!
The event is FREE for Young Agents and guests may attend for a small fee of $10. Click here to register for billiards!
BACK TO TOP
IIABA VIRTUAL UNIVERSITY: Latest Edition of VUPoint Newsletter Now Available
The IIABA Virtual University, a tremendous free resource to IIARI members, has published its’ latest edition of the electronic newsletter, VUPoint. Below are a series of article now available for your education and reading enjoyment.
BACK TO TOP
COMING SOON!
NEW MEMBER MARKETING ACTIVITY CENTER
The Member Marketing Activity Center, or MMAC, is the new game-changing marketing tool for IIARI members and designed to provide you with valuable marketing tools and services to help you grow your business. Click here for more information.
BACK TO TOP
BIG “I” PRAISES REINTRODUCTION OF SURPLUS LINES BILL IN HOUSE
Legislation provides practical targeted reform of the nonadmitted market
The Independent Insurance Agents & Brokers of America praised the reintroduction of the Nonadmitted and Reinsurance Reform Act of 2009 sponsored by Rep. Dennis Moore (D-Kan.) and Rep. Scott Garrett (R-N.J.). The legislation, often referred to as the “surplus lines bill,” is another example of a positive targeted approach to regulatory reform.
“The surplus lines bill is an excellent example of a pragmatic approach to help bring needed targeted reform to the state insurance regulatory system,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs. “We appreciate Representatives Moore and Garrett for introducing this measure and look forward to working with the House and Senate for passage in the 111th Congress.”
The legislation singles out two areas where there is general consensus for reform: surplus lines regulation and reinsurance supervision. Independent insurance agents and brokers play a crucial role in surplus lines (or nonadmitted) insurance, which provides coverage for unique or hard-to-place property-casualty risks.
The bill modernizes surplus lines regulation by making the insured’s home state the source of regulation for individual surplus lines transactions. The bill also seeks to reduce overlapping, multiple-state regulation of both reinsurer financial condition and credit-for-reinsurance on the balance sheets of ceding insurers.
“This legislation, by applying single-state regulation and uniform standards to the nonadmitted and reinsurance markets, along with giving the state sole regulatory authority, will preserve the strengths of the state-based insurance regulatory system,” says Tom Koonce, Big “I” assistant vice president for federal government affairs.
Similar legislation passed the House of Representatives in previous Congresses with overwhelming support from both sides of the aisle. The Big “I” believes that such strong bipartisan support coupled with near-unanimous industry approval proves that this model of limited regulatory reform of state regulation is the appropriate and most practical approach.
BACK TO TOP
BIG “I” APPLAUDS REINTRODUCTION OF NARAB II
Legislation Reforms Agent Licensing
The Independent Insurance Agents & Brokers of America recently expressed its strong support for bipartisan insurance agent licensing reform legislation introduced by Rep. David Scott (D-Ga.) and Rep. Randy Neugebauer (R-Texas).
The legislation, commonly referred to as NARAB II, would provide for streamlined non-resident insurance agent and broker licensing while preserving state insurance regulation and consumer protections. This bill would achieve much needed reciprocity in producer licensing and help policyholders by permitting greater competition among NARAB members.
“Throughout the current financial crisis, the state insurance regulatory system continues to show how well it protects both individual consumers and businesses,” says Brett Nilsson, Big “I” chairman. “Although the system has worked effectively to ensure insurer solvency and look after policyholders, the system does need improvement in the area of agent licensing. NARAB II would reform and improve the current state-based system of insurance regulation by providing one-stop, non-resident licensing reciprocity.”
NARAB II would build upon regulatory experience at the state level, promote consistency, and preserve marketplace responsiveness. Similar legislation, H.R. 5611, passed the full House on suspension in September 2008 with over 50 bipartisan cosponsors.
“NARAB II provides a mechanism for establishing true nonresident licensing reciprocity for the tens of thousands of Big “I” members who operate on a multi-state basis,” says Robert A. Rusbuldt, Big “I” president & CEO. “This legislation improves licensing while ensuring that states retain the authority to regulate marketplace activity and enforce important consumer protection laws.”
The Big “I” is an advocate for reforming the state system of insurance regulation and continues to oppose federal regulation, optional or otherwise. However, the Big “I” believes that the state system can’t effectively address certain regulatory problems and thinks there is a vital role for Congress to play in helping to modernize state regulation. The NARAB Reform Act is such targeted reform as it only relates to marketplace entry and would not impact the day-to-day state regulation of insurance.
“We commend Reps. Scott and Neugebauer for introducing this important legislation and the over thirty members of Congress who have signed on as original cosponsors,” says Charles E. Symington, Big “I” senior vice president for government affairs. “We were encouraged by the House’s action on this legislation last year and look forward to working with both the House and the Senate on consideration of this legislation in the 111th Congress.”
BACK TO TOP
RI CHAPTER OF CPCU ANNOUNCES JUNE MEETING
The Rhode Island Chapter of CPCU will hold its monthly meeting on Thursday, June 25 at Chelo’s on the Waterfront in East Greenwich. The meeting agenda will include Scholarship Awards Presentation and Installation of RI CPCU Board. The guest speaker will be Tony Petrarca of Channel 12 (and son of Hap Petrarca).
Registration and Cash Bar begins at 5:30 p.m.
Dinner and Welcome begins at 6:30 p.m.
RSVP by June 20 to Noreen Dussault, CPCU, at 952-2985 or email dusohome4@aol.com or Tom Kurze, CPCU, at 270-9233 or email tkurze@metlife.com.
BACK TO TOP
