Lobbyists for property-casualty carriers must convince Washington lawmakers that insurers are far better at risk management than their banking counterparts to avoid onerous federal regulation, the p-c industry's top spokesman warned.
As Congress contemplates expanded oversight of financial services–including insurance, “insurers can definitely make the case that they're much more stable [than banks] in terms of insolvencies,” said Robert P. Hartwig, president of the Insurance Information Institute, during a speech at the 20th annual Executive Conference for the Property-Casualty Industry, run by The National Underwriter Company, sponsored by Ernst & Young and Dewey & LeBoeuf.
Mr. Hartwig pointed out that few insurers become insolvent, even after major catastrophes, while at least 19 banks have failed in 2008 alone–including the largest in history, Washington Mutual–all undermined by reckless subprime mortgages and unwise securitizations of such loans. “The toxic chickens have come home to roost,” he said.
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