Coalition Aims To Fight U.S. Cat Insurance Pool Proposal

NU Online News Service, May 27, 3:35 p.m. EDT

A coalition of environmental and conservative groups, backed by a consortium of insurance interests, says it will fight legislation to create a federal catastrophe insurance pool.

An official from the Sierra Club and a member of the conservative public policy think tank Competitive Enterprise Institute as part of their effort launched a new Web site for the coalition Americans for Smart Natural Catastrophe Policy. The new Web site and renamed group is

Today's launch also served as an opening salvo against legislation introduced in the House last week by Rep. Ron Klein, D-Fla, that would allow states to create a national catastrophe insurance pool.

"The proposals that are being made to change the way that the United States backstops catastrophe risk from Rep. Klein, we believe, are an attack on the free market," said Eli Lehrer, director of the insurance project at the Competitive Enterprise Institute.

"There is a productive private industry, and we believe these proposals, although made from somebody with his heart in the right place, are simply likely to destroy a productive industry," he said.

He said the legislation would "impose a significant burden on taxpayers around the country" and undo reforms that states are undertaking to improve the underwriting environment for insurers.

"We feel it is important to take action now to protect lives and property that are at risk for natural catastrophe, making property more resilient to catastrophes like hurricanes and opposing policies that will essentially provide incentives to people to locate in risky places," said Ed Hopkins, Sierra Club director of environmental quality.

Mr. Hopkins said there is a better way of providing for protection through programs to help homeowners strengthen their homes against hurricanes "and reduce the underlying risk."

Mr. Lehrer said that based on the defeat of legislation to make wind risk a part of the National Flood Insurance Program, and lukewarm support by the Obama administration for expanding the federal government's exposure to catastrophe, he felt confident Rep. Klein's bill would be defeated.

"I think there is a lot of opposition to this," said Mr. Hopkins. "And we will be working hard to make sure that the concept of wind insurance doesn't advance during this Congress."

According to the group's Web site it is supported by Allianz of America, Association of Bermuda Insurers and Reinsurers, Chubb, Liberty Mutual Group, National Association of Professional Insurance Agents, Reinsurance Association of America, Swiss Re, USAA and Zurich.

Mr. Lehrer said there is a large, diverse group ranging from environmental to consumer to public policy and taxpayer advocacy groups involved in defeating this and similar legislation.

Additional information is available at

(This story was updated on May 28 at 2:15 p.m. with a correction in paragraph 10)


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