Here is the link to the National Underwriters Take

If this passes, woe to this business as the Feds will now be in the Insurance Business.

Dave,

I couldn't get your link for the NU article to come up.  I'll try to post it here, but you may have to have a subscription to get it to come up.  The 1st link is for the NU article, and the 2nd if for the Insurance Journal article.  The IJ article also has a lot of comments attached at the end where people give their thoughts on it.  keep in mind that most people that read the IJ are insurance oriented professionals.

http://www.propertyandcasualtyinsurancenews.com/cms/nupc/Breaking%20News/2007/07/26-FLOOD-mb 

http://www.insurancejournal.com/news/national/2007/07/27/82099.htm 

Insurers Balk as House Panel Votes to Add Wind Coverage to Flood Program

July 27, 2007

Private insurance companies are balking at a decision by a key House panel to expand the federal flood insurance program to include wind coverage.

The House Financial Services Committee voted yesterday to add wind coverage to the National Flood Insurance Program (NFIP).

"We continue to believe that adding wind coverage to the NFIP is not the right solution," commented American Insurance Association (AIA) President Marc Racicot.

AIA commissioned a study by Towers Perrin showing that adding wind could taxpayers as much as $100 billion to $200 billion if the federal government began displacing the private market by providing wind coverage.

At recent hearing, AIA was joined by other insurer groups in opposing the expansion. They included the Property Casualty Insurers of America and the Reinsurance Association of America.

PCI told lawmakers that, while the inclusion of wind coverage within the federal program is well-intentioned, it may produce unintended negative consequences for millions of American insurance consumers.

"Including wind coverage within the NFIP will create artificial subsidies, thereby essentially raising rates for consumers in inland parts of the country who are not subject to the same kind of wind-damage risks faced by policyholders on the coasts," said Ben McKay, PCI's senior vice president, federal government affairs. "It is hard to believe that Congress wants to give more responsibility to a failed government program. I wouldn't invest in a company that had inadequate cash flow and $17.5 billion of debt."

According to PCI, the combination of homeowners' insurance coverage, state wind pools and flood coverage available through the NFIP already provide consumers protection from wind and water damage. Moreover, the current system provides consumers the opportunity to purchase coverage at a price that reflects the risk based on the location of the property and the likelihood of a loss.

"State residual market mechanisms provide wind coverage where there is no market, and private insurers provide wind coverage where there is a market," McKay said. "The Taylor bill simply creates a federal government fund that will compete with existing state funds and potentially with the private sector."

Franklin W. Nutter, president of the Reinsurance Association of America (RAA), also argued that the expansion provision was unnecessary because private sector insurers, reinsurers, capital market participants, and residual market programs already provide wind coverage.

In a letter sent to Chairman Barney Frank, D-Mass., and Ranking Member Spencer Bachus, R-Ala., of the House Financial Services Committee, Nutter said that it "fundamentally alters who bears the risk of loss from wind. Instead of spreading this risk throughout the private worldwide insurance marketplace, this legislation puts the entire burden of deficits on the U.S. taxpayer. This fundamental shift is not needed. There is adequate wind capacity being provided by direct insurers and/or state residual markets, and there is a very robust global private reinsurance market for wind to help insurers manage their risk of loss."

Insurers had hoped lawmakers would have instead pursued a proposed six-month study by the Government Accountability Office, which they said would have provided an analysis of adding wind coverage to the NFIP and provided a better understanding of the real cost of adding wind coverage.

The measure approved by the House Financial Services Committee is H.R. 3121, the "Flood Insurance Reform and Modernization Act of 2007," which also includes other reforms to the NFIP that insurers support.

"The House Financial Services Committee voted 38-29 to approve legislation yesterday that would expand the National Flood Insurance Program to offer wind damage coverage.

This fall, the legislation, HR 3121, will move to the House floor for action. It combines previously introduced flood reforms designed to increase the number of consumers in the program and reduce subsidies for some properties with a bill to add the wind coverage option.

The measure requiring windstorm insurance to be provided by the flood program was introduced earlier this year by Rep. Gene Taylor, D-Miss.

In voting yesterday, committee members split largely along party lines. Republican opposition to the bill mainly concerned inclusion of the wind coverage provision, which they argued would increase taxpayer liability for a program already deeply in debt.

Democrats countered by noting a provision in the bill requiring premiums for wind coverage to be actuarially sound. “The answer to ‘how much is the bill going to cost?’ is ‘nothing,’” said Rep. Barney Frank, D-Mass., the chairman of the committee.

Republicans responded that it is unlikely the actuarial soundness called for will survive political pressure to lower premiums.

“We all know our constituents will be calling us from day one begging for lower rates and higher coverage,” said Rep. Tom Feeny, R-Fla.

Later in the hearing, Rep. Feeny said the committee would be “usurping” the private market if the wind coverage provision were passed, and pointed to the experience of the Florida market since the state established its own Joint Underwriting Authority as insurer of last resort.

That entity, now known as Citizens Property Insurance Corp., is currently the largest insurer for wind coverage in the state, he said.

Inevitably, Rep. Feeny argued, the question of offering lower rates arises, and “no legislator in his right mind would vote against subsidizing,” he said. “It’s happened in Florida, and we’re going to do it again if we adopt this bill.”

Rep. Frank, however, said that opponents would not have to look far to see a difference in this particular legislation.

“I would give one piece of evidence that Congress can say ‘no,’” he said, “and that’s the rest of this bill.”

Other provisions in the bill would require the Federal Emergency Management Agency to revise the nation’s flood maps by 2010 and phase out subsidies for structures built before the NFIP was established that are not primary residences.

Insurance groups voiced opposition to the wind coverage provision, echoing many of the same concerns voiced by members of the panel.

“Adding wind coverage to the National Flood Insurance Program would create artificial subsidies, which would essentially raise rates for consumers in noncoastal areas…” said Cliston Brown, federal affairs director for the Property and Casualty Insurers Association of America (PCI).

Mr. Brown noted that “the NFIP is already $17.5 billion in debt, so adding further exposure to the program is not a good idea. Furthermore, state residual market mechanisms provide wind coverage where there is no market, and private insurers provide wind coverage where there is a market.”

American Insurance Association President Marc Racicot said of the passage by the committee that “we continue to believe this is not the right solution,” noting a Towers-Perrin study commissioned by the group that the impact on taxpayers could be as high as $200 billion. That study, according to Rep. Taylor, is based on false assumptions.

Mr. Racicot said AIA had hoped the committee would have chosen to pursue a proposed six-month study by the Government Accountability Office, “which would have provided in-depth analysis of adding wind coverage to the NFIP and provided a better understanding of the real cost of adding wind coverage.”

Rep. Frank said during the markup that the bill will not go to the House floor before lawmakers leave for their August recess, and may not be acted on until October."

BY MATT BRADY
NU Online News Service, July 27, 9:03 a.m. EDT

The above is from this article >>>>

Steve et al:

Have copied and pasted the info which was on the link.

You do have to subscribe to get the daily information. Im on so many subscriptions i could make a house payment, LOL

 9/13/2007 Miss. Insurance Candidate Chaney Supports Multi-Peril Policy

"Republican nominee for Mississippi insurance commissioner, Sen. Mike Chaney, R-Vicksburg, formally endorsed U.S. Rep. Gene Taylor's, R-Miss., Multiple Peril Insurance Act (H.R.920).

The MPIA would allow property owners to purchase wind and flood coverage in a single policy.

read more of the insurancejournal.com article >>  http://www.insurancejournal.com/news/southeast/2007/09/13/83437.htm

There has not been any action on this bill since February 2007 and the last report I saw indicated that the bill was dead in the water.

Lets hope the bill stay dead in the water. Can you imagine the paperwork that would be required for both flood and wind claims. I get nauseaous just thinking about it.

This was shot down last year, but the politicians from the gulf coast states keep trying to push it through.  There has been a revival of their efforts in the last month or so, and looks like it was resoundingly shot down again.  Hopefully these folks will let it die this time and concentrate their efforts on getting matters taken care of at home properly vs trying to make the rest of the country subsidize their mixed up courts/intrepretation of the coverages.  Here is the article I read this morning:

Senate rejects adding wind to flood insurance program

Posted by SEAN REILLY May 08, 2008 6:46 AM