Declarations

Declarations

Pay for flood now or later

“I would put flood insurance back in the homeowner’s policy maintaining the federal government as the reinsurer … We need to bring more people into the system … We need to bring them into the system and have them pay a little bit for that coverage. Because ultimately we either do it in an organized fashion, by prepaying for insurance, or we do it in a post expensive disorganized fashion, where Air Force One flies over an affected area and starts shoving FEMA money out the door.”

— Alex Soto, president of InSource agency in Miami, and president of the Independent Insurance Agents & Brokers of America, in an exclusive interview with Insurance Journal’s Andrew Simpson, at the IIABA annual legislative conference in Washington, D.C.

Contingent commissions

“I think the whole contingent commission business was handled badly by the regulators. First of all, it should have been handled by the insurance commissioners, not by attorneys general. That’s the first thing. Second, contingent commissions were in existence long before I got into the insurance business. It was a market tradition. Now if you want to change something that’s has been in the industry for many, many years, the logical thing to have done was call the industry leaders together, make your case and have them agree or disagree. If they disagreed, they could appeal that disagreement. We are a democracy.”

— C.V. Starr & Co. Chairman Maurice “Hank” Greenberg, criticizing attorneys general in their handling of the controversy over contingent commissions paid to insurance brokers. He said the controversy has been mishandled and that has caused unfortunate disruption in the industry.

Line in the sand

“I am drawing a line in the sand. If I find that Allstate’s rates are excessive, refunds will occur. I will take clear and decisive action to protect consumers.”

— California Insurance Commissioner Steve Poizner noting he will seek refunds for Allstate customers if the Department of Insurance deems the company’s requested rate hike to be excessive. The insurer recently announced it would stop writing new homeowners policies in the Golden State, and has a rate filing pending with the DOI for a 12 percent increase. The company said the rate increase would help it better prepare for natural disasters. But Poizner is questioning whether the rates are excessive, given that other insurers have recently reduced their rates.

Billions in savings

“An integrated program that includes a state catastrophe fund and a national backstop in addition to the traditional insurance market, while helping to fund mitigation efforts, enhance first responder programs and expand homeowner education, would save American homeowners.”

— Dr. David Appel, principal and director of economics consulting for actuarial and consulting company Milliman, which recently issued a report noting that American homeowners could save $11.6 billion annually if private funded catastrophe programs were enacted in disaster-prone states and backed by a similar national program.

Topics Homeowners