House Committee Investigates Insurance Industry Response to Katrina

NAMIC and other property/casualty trade associations united last week to dispel concerns some lawmakers have voiced about the industry's claims-paying activities after Hurricane Katrina.

At a hearing of the House Financial Services Oversight and Investigations Subcommittee, Robert Hartwig, president and chief economist of the Insurance Information Institute, testified for the industry and told lawmakers of the accomplishments of insurers.

In response to comments by a few detractors that the insurance industry should no longer be exempt from antritust laws, Hartwig explained that McCarran-Ferguson provides a very narrow exemption that allows insurers to pool data and that without it many smaller insurers would be unable to compete with larger insurers, thereby driving up rates for consumers.

Despite the fact that Katrina was the most expensive storm to face the U.S. insurance industry, carriers stepped up and helped thousands whose property was damaged or destroyed. In the wake of the weather disaster:

Insurers paid out an estimated $40.6 billion on 1.7 million claims for damage to homes, businesses, and vehicles in six states.
As of the first anniversary of Katrina in August 2006, more than 95 percent of the 1.1 million homeowners’ claims in Mississippi and Louisiana had been settled, with insurers paying more than $15.5 billion.
Fewer than 2 percent of Katrina claims in Louisiana and Mississippi are being contested, either through mediation or litigation.
The vast majority of homeowners in Louisiana and Mississippi said they are satisfied with their insurance companies, according to a poll conducted by IPSOS Public Affairs.

Posted: Tuesday, March 06, 2007 12:00:00 AM.

Salary Survey: Reports updated and available online 24/7/365.

(317) 875-5250 - Indianapolis | (202) 628-1558 - Washington, D.C.

Contact NAMIC | Press | Advertise | Sponsor

We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.