NAIC ADOPTS RESOLUTION ON CATASTROPHIC RISK

The National Association of Insurance Commissioners adopted a revised resolution on catastrophic risk at its summer meeting in Washington D.C.

“The resolution does a very good job of outlining many of the problems that we are currently facing,” said Donald Griffin, vice president of personal lines for the Property Casualty Insurers Association of America (PCI). “We fully support their conclusions regarding loss mitigation, the need for strengthening building codes and developing smarter land use practices. The resolution also calls for a specific approach to state catastrophic funds and the establishment of a federal reinsurance program.

“While we commend the NAIC for its efforts to look at these issues, expanding the role of government, both at the state and federal levels will require more discussion,” Griffin said. “For example encouraging the creation of a catastrophe fund in every state may not be necessary.”

According to PCI, as part of its effort to improve the nation’s response to natural disasters, the NAIC is also considering a proposed coordinated disaster reporting system. This system, as it is currently being discussed, would establish a nationwide reporting system run by the NAIC that collected, maintained and distributed claim data in order to assess the impact of a disaster on the insurance marketplace and the progress being made during the recovery process. The goal of the system would be to bring greater consistency and uniformity to the data reporting process.

The PCI told the Disaster Reporting Working Group that the NAIC can play a key role in helping individual states develop consistent and uniform disaster reporting requirements. However, the creation of a new NAIC database raises legal questions regarding the confidentially of the insurer data being presented, PCI said.

Source: Property Casualty Insurers Association of America