A rift within the property-casualty insurance business over how much government help, if any, the industry needs to handle catastrophes appears to be growing.
Last week, as trade organizations and carriers continued choosing sides, the Property Casualty Insurers Association of America (PCI) announced it was joining ProtectingAmerica.org, a group supported by Allstate, urging a federal-state system to backstop insurers after mega-catastrophes.
A portion of property insurance premiums that corresponds with the catastrophic risk to be covered would be deposited into the catastrophe funds, where they would grow tax-free. No tax dollars would be used to support the funds, and insurance companies could not use these funds for any purpose other than to pay claims from catastrophes that exceed a certain threshold.
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