NEW YORK--The National Conference of Insurance LegislatorsSubcommittee on Natural Disasters voted down an amended resolutiontoday that would have supported the establishment of statecatastrophe funds that would be eligible to receive federalfunds.

The vote today was split among the eight present subcommitteemembers attending the meeting here and so it did not receive themajority vote necessary to proceed out of the subcommittee.

Florida State Sen. Steven Geller, D-Hallandale Beach, co-chairof the subcommittee, proposed the resolution, which containedchanges to a previous resolution that was not voted on at NCOIL'slast meeting in Washington, D.C. due to concerns expressed at thetime by insurance associations and others.

The amended resolution would have allowed states to establishcatastrophe funds "which may be eligible to receive federal fundsunder specified conditions."

It stipulated that if a natural disaster caused losses to exceedan unspecified "designated threshold," then the federal governmentwould provide the appropriate state fund with money to coverinsured losses above the threshold.

"The federal options should include a catastrophe reinsurancebackstop and a federal loan program," the resolution stated. Forboth the loan program and the backstop, the resolution containedlanguage that the states would, over time, reimburse the federalgovernment.

The resolution also said "that NCOIL believes such astate-federal system would result in dramatically lowerproperty-casualty insurance rates and would substantiallystrengthen the solvency of the private sector insurance industry,to the benefit of citizens nationwide."

Sen. Geller said the amended resolution was vaguer than theprevious version so that it would be less controversial and wouldnot get held up by details.

He said that he has been pushing for a national catastrophe planfor 10 years, and in that time he had compromised away many detailsthat he supported. He noted, however, that passing a resolutionthat put some sort of federal program in place was better thanpassing nothing.

But the vagueness of the amended resolution was precisely whatcaused some of the opposition among the subcommittee members.

New York Assemblyman Ivan LaFayette, D-Queens, said that moredetails are needed to vote on such a resolution, and New York Sen.William J. Larkin Jr., R-C-Cornwall, objected to the notion ofhaving a "designated threshold" above which federal funds would beavailable without defining what the threshold would be.

Regarding the limited timeframe that the subcommittee had toreview and vote on the resolution, Sen. Larkin said, "Haste makeswaste."

The resolution received statements of support fromrepresentatives from Allstate Insurance Company and State Farm.

Industry associations, including the Reinsurance Association ofAmerica (RAA), the Property Casualty Insurers Association ofAmerica (PCI), and the American Insurance Association (AIA), andthe National Association of Mutual Insurance Companies (NAMIC)opposed the resolution and stated that national efforts shouldfocus on mitigation.

A representative from NAMIC conceded that some of its membersdid not conform entirely to the association's position, but theassociation and its members do agree that any catastrophe backstopshould be reserved strictly for mega catastrophes.

Sen. Geller agreed, but said the actual loss threshold in theresolution, like many other specific details, was intentionallyleft blank so that Congress could define it.

To counter a belief among some of the resolution's critics thatany national catastrophe plan would be a subsidy for Floridaspecifically, Sen. Geller played an edited video from a WeatherChannel series that outlined major catastrophes that could occur atany time all around the country. Among them were wildfires in partsof Texas and Calif.; hurricanes in New York, Savannah, Georgia andHouston; earthquakes in Las Vegas, Seattle and the MississippiRiver Valley; a volcanic eruption in Washington State; and serioustornadoes affecting cities such as Dallas and St. Louis.

After the subcommittee meeting, Sen. Geller expressed doubt thatany national catastrophe resolution would pass through thesubcommittee. He noted that he has been a key proponent of themeasure, and that this meeting was his last NCOIL meeting. He saidhe had some clout as a state senate minority leader and a pastpresident of NCOIL, and added that he doubted a similar resolutionwould get passed in the future based on the results of hisefforts.