WASHINGTON–A rift within the property-casualty insurancebusiness over how much government help, if any, the industry needsto handle catastrophes appears to be growing.
Yesterday, as trade organizations and carriers continuedchoosing sides, the Property Casualty Insurers Association ofAmerica (PCI) announced it was joining ProtectingAmerica.org, agroup supported by Allstate, urging a federal-state system tobackstop insurers after mega-catastrophes.
A portion of property insurance premiums that corresponds withthe catastrophic risk to be covered would be deposited into thecatastrophe funds, where they would grow tax-free. No tax dollarswould be used to support the funds, and insurance companies couldnot use these funds for any purpose other than to pay claims fromcatastrophes that exceed a certain threshold.
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