On the heels of two recent congressional hearings on insurance regulation, NAMIC is now preparing to testify again – this time on natural disaster legislation. The House Subcommittee on Oversight and Investigations will hold a hearing tomorrow, July 2, in West Palm Beach, Fla. titled “The Homeowners’ Insurance Crisis: Solutions for Homeowners, Communities, and Taxpayers.” This field hearing was called at the request of Rep. Ron Klein, D-Fla., in his 22nd congressional district, in order to highlight his legislation, H.R. 2555, The Homeowners Defense Act.
Klein’s bill, similar to legislation he introduced in the 110th Congress, deals with coastal insurance affordability and availability. While this is an important issue that needs attention, NAMIC has serious concerns that this specific proposal would expand the federal government’s role to a point that it would artificially suppress insurance rates, begin to crowd out the private insurance market, and encourage unwise residential and commercial development in high-risk coastal regions. As the only insurance trade association testifying, NAMIC is likely to be the lone voice of caution.
Testifying on behalf of NAMIC will be Robert Detlefsen, Ph.D., NAMIC’s vice president of public policy, an expert on natural disaster issues. Given the circumstances of the hearing and NAMIC’s position, Detlefsen’s expertise will be necessary to field some potentially difficult questions. He will remind the subcommittee that government intervention is not an effective substitute for the economic principles affecting the complex relationship between supply, demand, and price. Furthermore, he will urge Congress to make an effort to establish a proper balance between the roles of the private insurance sector and governments, in order to send proper signals to discourage development and/or mitigate its effects in dangerous areas.
Although the focus in Washington has been on financial services regulatory reform, this hearing is a good reminder of the other potential issues affecting our industry that continue to arise. NAMIC will continue to work hard to stay ahead of these issues and make sure the property/casualty insurance industry has a voice on Capitol Hill.
Click here to watch the hearing live tomorrow at 10:00 AM.