Industry leaders taking sides on federal multiperil insurance
Rep. Gene Taylor proposed legislation to expand the National Flood Insurance Program (NFIP) to cover wind damage, in addition to floods. NFIP currently only covers damage from a hurricane's storm surge. Hurricane Katrina proved how difficult it can be to separate wind from water damage near shorelines. The American Insurance Association has squarely come out in oppostion to Taylor's NFIP expansion bill, having commissioned a study which found that the addition of wind coverage would increase NFIP's deficits. In response, Rep. Taylor wrote a letter to the President of AIA, Gov. Marc Racicot, asking him to retract the report because it is "yet another bad faith action by the insurance industry" alleging "wild estimates of federal encroachment into private markets also are unfounded." Taylor is not without support for his legislation, in a surprising departure from the rest of the large insurance industry segment, Nationwide and Allstate have voiced support for the NFIP expansion. The House Committee on Financial Services, Subcommitte on Housing and Community Opportunity will hold hearings on H.R. 920, the Multiple Peril Insurance Act of 2007 today, July 17, 2007, at 2pm. Click here to watch the hearings live.
