The managers of the federal flood and crop insurance programsaren't doing enough to keep Congress informed of the potential riskglobal warming represents to the taxpayer, a key member of theSenate Homeland Security Committee charged last week.

Sen. Susan Collins, R-Maine, said she was “struck by the lack ofurgency you are displaying in dealing with these issues.”

Sen. Collins, the committee's ranking minority member, wasresponding to testimony by the Government Accountability Officethat global warming constitutes a “significant” financial risk toboth government and private insurers, urging managers of federalinsurance programs to reassess the potential risk to taxpayers andreport to Congress as soon as possible.

“You have a very relaxed attitude toward a looming crisis,” Sen.Collins said in reaction to testimony at the hearing by EldonGould, administrator of the Risk Management Agency in the U.S.Department of Agriculture, and Michael Buckley, deputy assistantadministrator for mitigation at the Federal Emergency ManagementAgency, a unit of the U.S. Department of Homeland Security.

In response to the criticism, Mr. Buckley said the NFIP isindeed concerned, and is reacting to the fact that the NationalFlood Insurance Program has had to borrow money to pay claimsbecause of the 2004 and 2005 hurricanes. “We realize HurricaneKatrina is not an anomaly,” he said.

At the same time, Andrew Castaldi, senior vice president andhead of catastrophic perils for Swiss Re in the United States,testified that while it remains “an open question” whether theharsh coastal storms of 2004 and 2005 are attributable to globalwarming, “it is quite clear that, if left unchecked, carbon dioxideemissions will alter the natural variations of climate change andwill affect U.S. weather patterns, and some naturalcatastrophes.”

Therefore, he added, “preventative action…must be takentoday.”

“If we wait until we have achieved absolute certainty, we runthe risk of acting too late,” he added.

However, Mr. Castaldi emphasized that while some coastalinsurers, officials and consumers are suggesting that “naturalcatastrophes are not insurable in the private market,” meaning agovernment backstop is required, “that is not Swiss Re's view.”

Indeed, he said that because the risks can be modeled by theprivate sector and are random in nature, “they are insurable.”

“The largest events can and have been absorbed by the industry,”he continued during the committee hearing on “Dangerous Exposure:The Impact of Global Warming on Private and Federal Insurance.”

While a government backstop for such risks “is inappropriatepublic policy” in Swiss Re's view, Mr. Castaldi added, there aresteps the public sector can take to mitigate future damage,including better zoning and building codes.

The hearing was prompted by an April 6 United Nations reportpredicting drastic consequences from global warming unlessgreenhouse gas emissions are checked.

In opening the hearing, Sen. Joe Lieberman, D-Conn., said thereport indicates that, “in sum, we're looking at a future ofintensified floods, droughts, pestilence, fires and storms–allcarrying dire and devastating economic consequences.”

Commenting on the hearing, Justin Roth, a senior director at theNational Association of Mutual Insurance Companies, said that“whether or not global warming exists, we agree with Sen. Liebermanthat the insurance industry and the National Flood InsuranceProgram are facing increased claims due to the growing number andintensity of catastrophic storms.”

He added that “we believe that Congress can take a lead on thisissue by appropriating more money for mitigation, and encouragingstates to adopt strong statewide building codes.”

Cliston Brown, director of federal public affairs at theProperty Casualty Insurers Association of America, noted that“climate change is creating rapidly escalating risks for oureconomy, and this problem illustrates why we need to ensure thelong-term integrity of the NFIP.”

“We commend the committee for requesting a GAO study, andholding a hearing on this important issue,” Mr. Brown said.