CHICAGO (Dec. 4, 2005)—A senior spokesperson for the nation’s largest property/casualty insurance trade has strongly urged regulators to increase their focus on personal responsibility and to resist efforts that would add new underwriting requirements.
Commenting on the first draft of the NAIC’s national plan to fund losses from natural catastrophes, National Association of Mutual Insurance Companies (NAMIC), Senior Vice President—State and Regulatory Affairs, Roger H. Schmelzer, said that while now is the right time to seek answers on catastrophe loss, “the biggest dangers” of this initiative would be a public policy result that “reduced the need for individuals to take responsibility for their personal insurance coverages and created new mandates for insurance companies that would impede the ability to make actuarially sound underwriting decisions.”
Schmelzer testified Saturday before the Catastrophe Insurance Working Group at the winter meeting of the National Association of Insurance Commissioners here.
He also said that the place to start to ensure adequate capitalization of the insurance industry is with the underlying insurance market.
“Let’s start with the regulation we have,” Schmelzer said, echoing a theme sounded throughout the proceeding. “Property/casualty insurance companies need to be able to underwrite risk as accurately as possible and at a price that reflects its likelihood.”
“It will be argued, that what is most personally responsible is for individuals with the highest potential for risk to pay a risk-based premium to cover it,” Schmelzer added.
NAMIC is undertaking its own evaluation of public policy options related to natural disasters, Schmelzer said. He noted that NAMIC had long been involved in building code reform and suggested that mitigation is the “first defense” against calamitous loss.
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Posted: Sunday, December 04, 2005 12:00:00 AM. Modified: Monday, December 05, 2005 9:35:25 AM.
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