A Treasury Department official last week threw cold water on legislation creating a joint federal-state program to backstop state-sponsored insurance programs that provide natural catastrophe coverage for homeowners.
Indeed, the legislation would displace private markets, promote riskier behavior and be costly as well as “unfair to taxpayers,” Phillip Swagel, Treasury's assistant secretary for economic policy, told a Sept. 6 hearing before two subcommittees of the House Financial Services Committee.
An official of the Reinsurance Association of America also voiced concern about the legislation, predicting it would “unnecessarily crowd out the private reinsurance market.”
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