Insurance regulators from two coastal states sparred over what the federal government's role should be in solving catastrophe insurance problems, with one saying Uncle Sam should have none until the industry is essentially on life support.

"I don't think we should go to a federal solution until we're on our backs, bleeding to death and breathing our last breath," said Scott Richardson, director of the South Carolina Department of Insurance, during a panel of regulators at the Property-Casualty Insurance Joint Industry Forum.

Mr. Richardson was reacting to a suggestion by Louisiana Insurance Commissioner James Donelon, who proposed a system of private insurance covering all perils, backstopped by the federal government. "A federal fix is the ultimate solution, but it has to be based on the private sector," said Mr. Donelon.

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