Insurers and trade groups are far from unanimous in reacting to a proposed regulation by New York Insurance Superintendent Eric Dinallo that would require property writers to direct part of their premiums into a catastrophe reserve fund to help pay for natural disaster claims, regardless of current tax considerations.
The concept has some offering support, some opposition, and some on the fence.
“Most people probably think that the extra money they pay on their homeowners insurance for hurricane protection goes into a 'very rainy day fund' to pay claims when hurricanes hit,” said Mr. Dinallo, who lobbied for his proposal in an Oct. 8 op-ed column in Newsday. “In fact, because of current insurance accounting and tax rules, if there is no hurricane, the extra money goes to insurance companies' profits.”
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