Insurance industry representatives and some regulators have expressed concern that previously discarded ideas such as an all-perils policy and checklist have made their way back into the National Association of Insurance Commissioners' proposed catastrophe program.

Speaking at the Catastrophe Insurance Working Group session at the spring quarterly meeting, some felt that returning to consider those points that were previously discarded wasted the work that was done over the past year on the project.

“Just to keep rehashing this over and over again is somewhat ridiculous,” said one distressed Eastern state regulator, who asked for anonymity.

Don Griffin, manager of personal lines for the Property Casualty Insurers Association of America, said that after much effort at achieving consensus, a most recent draft had turned back to the original concept.

Returning to a mandate that insurers offer all-perils policy represents what he considers a “step backward,” and he urged the panel to reconsider.

Florida regulator Ray Spudek said the new proposal was put out for a 30-day comment period once again due to a series of events that have taken place in the past several weeks.

He cited the State Farm case rulings in which a federal judge said limits on how policy flood exclusion language can be applied as well as possible federal legislation possibly undermining the exclusion as a reason for the industry to act now.

U.S. Rep. Gene Taylor, D-Miss., has proposed the expansion of the National Flood Insurance Program to include losses from wind as well as flood to eliminate legal disputes over damage claims.

Also at the session, regulators mulled the possibility of forming an interstate compact to create a multistate catastrophe fund.

Karen Schutter, NAIC senior manager for business initiatives, said that such a fund might be helpful to smaller states that did not have the means to establish their own entities.

At the special meeting on the subject last month, regulators suggested that while states would welcome additional spreading of their own risks, they would be hesitant to pay for someone else's, Ms. Schutter said.

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All-Perils Policy Resurfaces In NAIC Cat Plan

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