The rift within the property-casualty insurance business over how much government help, if any, the industry needs to handle catastrophes widened considerably last week as the war of words heated up.
Indeed, trade organizations and carriers continue choosing sides in what promises to be a fierce battle, with the Property Casualty Insurers Association of America announcing it was joining ProtectingAmerica.org. The group, supported by Allstate, seeks a federal-state system to backstop insurers after mega-catastrophes.
Under the group's plan, a portion of property insurance premiums corresponding to catastrophic risk would be deposited into catastrophe funds, where they would grow tax free. No tax dollars would be used to support the funds, and insurers could not use the money for any purpose other than to pay claims from catastrophes that exceed a certain threshold.
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