An Allstate-financed group that is lobbying for creation of a national catastrophe fund is hailing a bill introduced in the New York legislature as an aid to their effort.
Filed last week, the bill by State Sen. Michael Balboni, R-East Williston, would create a New York fund that would involve a public-private partnership providing a backstop for the state’s property-casualty insurers in the event of a major natural catastrophe.
The legislation–titled the New York Consumers Catastrophe Preparedness and Protection Act–was applauded by the ProtectingAmerica.org group co-chaired by James Lee Witt, a former Federal Emergency Management Agency director.
“Sen. Balboni is taking the necessary first steps to prepare New Yorkers for catastrophe and to protect them from the financial consequences that follow. A statewide financial backstop is an important start, and federal representatives should follow Sen. Balboni’s lead in order to prepare for and protect all Americans from mega-catastrophes,” said Mr. Witt.
A spokesman for ProtectingAmerica, Pete McDonough, said New York is so far the only place where there is action in the state legislature to create such a fund.
He noted that late last year, two Florida members of Congress–Rep. Ginny Brown Waite and Clay Shaw, both Republicans–had introduced a proposed federal measure to create a national catastrophe fund.
While Allstate has provided seed money, Mr. McDonough said ProtectingAmerica.org is reaching out to other sources for financial support.
ProtectingAmerica.org says it includes first responders, emergency management experts, building officials and insurance industry leaders as members.
Mr. McDonough–who is in the Trenton, N.J. office of the Newark, N.J.-based Winning Strategies firm–said legislation for a catastrophe fund in New Jersey is expected “in a couple of months.”
The New York bill was assigned to the Senate Finance Committee for review. In the Assembly, Peter Newell, a spokesman for Assemblyman Alexander “Pete” Grannis, D-Manhattan, the Assembly Insurance Committee’s chair, said while he was not ruling the bill out, “we’re not in the cheerleader column for this yet.”
Mr. Newell suggested New York lawmakers would like to know what the experience and impact on capacity and rates has been in Florida and other states that already have catastrophe funds.
Mr. McDonough said a full-scale national launch of the catastrophe fund effort will be made in March, and this Friday Allstate Chief Executive Officer Edward Liddy would make the case for the fund before the National Press Club in Washington.
Allstate’s interest in a catastrophe fund is understandable, as the insurer had third-quarter losses of more than $3 billion from Hurricanes Katrina and Rita.