WASHINGTON (Jan. 30, 2008) – The National Association of Mutual Insurance Companies (NAMIC) issued the following statement in response to a report from the Government Accountability Office on the insurance industry’s actions following Hurricane Katrina. The remarks may be attributed to Carl Parks, senior vice president for government affairs.
“Once again, a federal government report has confirmed what the insurance industry has been saying since the 2005 hurricane season: Insurance companies did not engage in wrongdoing to avoid paying claims. This report has no mention of any evidence that the insurance industry engaged in a pattern of improperly attributing wind damage to water, which would have forced American taxpayers to foot the bill through the National Flood Insurance Program.
“The report from the GAO is the second from a federal agency in six months that reached the same conclusion. The Department of Homeland Security’s study released in August 2007 reported the same findings.
“In fact, insurance companies have paid an estimated $40.6 billion on 1.7 million claims for damage to homes, businesses, and vehicles in six states because of Hurricane Katrina, the largest loss in the history of insurance. More than 95 percent of the 1.1 million homeowners insurance claims from Hurricane Katrina in Louisiana and Mississippi – totaling more than $15.5 billion – were settled within one year after the storm. The Insurance Information Institute estimates that fewer than 2 percent of homeowners claims in Louisiana and Mississippi were disputed either through mediation or litigation.
“A recent survey indicates that the American public also does not share the views of the insurance industry’s critics. A random survey of 1,000 registered voters questioned in September 2007 showed more than 80 percent believe the failures following Hurricane Katrina are due to the federal, state, and local governments. Only 6 percent faulted insurance companies.
“There is no doubt that the storm was a horrific tragedy and a blight on the country’s history of handling catastrophic events. While the report does cite the need for reforms to the National Flood Insurance Program, it does not fault insurance companies for their actions following Hurricane Katrina. What’s needed now is a coming together of all stakeholders – insurers, consumers, policymakers, and politicians – to develop strategies to prevent and mitigate future property losses.
“NAMIC has been working closely with Congress on a number of important reforms that will help move our nation forward and better prepare us for the next disaster. Areas Congress should focus on include flood reform, building codes and increased mitigation.”
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Posted: Wednesday, January 30, 2008 12:00:00 AM. Modified: Thursday, February 28, 2008 2:27:08 PM.
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