The National Association of Insurance Commissioners has set up atask force to explore the long-term ramifications of global warmingfor the insurance industry.

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The action came at the group's spring meeting earlier thismonth.

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Tim Wagner, director of the Nebraska Insurance Department, willco-chair the panel that will examine how global warming will affectthe availability and affordability of insurance and the financialhealth of insurance companies.

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The task force will also consider actions necessary to enablestate regulators and insurers to mitigate and otherwise respond tothese problems.

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Mr. Wagner said it has become increasingly obvious that thecountry is experiencing bigger and more destructive storms. “We'reseeing all kinds of extreme weather in Great Plains states,including drought, tornadoes, brushfires and severe hailstorms,” hesaid.

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Washington Commissioner Mike Kreidler said the task force thathe will co-chair will look at whether insurers have adequatelyfactored these occurrences into their financial and riskmodels.

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According to a December 2005 study by the Boston-based Ceresinvestor coalition, U.S. insurers have seen a 15-fold increase ininsured losses from catastrophic weather events in the past threedecades.

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Andrew Logan, insurance program director at Ceres, said theindustry is threatened by the “perfect storm of rising weatherlosses, rising global temperatures and more Americans living inharm's way.”

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At the same time, the NAIC is currently developing a proposalfor a program to manage insured losses that arise from any naturalmega-catastrophe on the scale of Hurricane Katrina or bigger.

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The program, now in its infancy stage, would include some formof state and federal catastrophe fund back-up for insurers withincentives for efforts to protect against disasters and new effortsto ensure all homeowners have flood insurance.

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