Promoting the conservation of natural resources and encouragingrisk mitigation efforts along densely populated coastlines in theUnited States are the best avenues toward managing risk andreducing economic losses, the Reinsurance Association of Americatestified last month.

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In a hearing before the House Subcommittee on Insular Affairs,Oceans and Wildlife on Managing Ocean and Wildlife Resources,Franklin W. Nutter, RAA president, said, “The importance of riskmanagement to the conservation of our ocean, coastal ecosystems andwildlife resources in an increasingly unpredictable environmentshould be abundantly obvious.”

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He said the degree to which coastal areas “have been urbanizedand the increasing value at risk–higher property values in higherrisk areas–demonstrates the need for federal initiatives thatencourage natural disaster mitigation and assistance to protect notonly people and property but environmentally sensitive habitatsalong our coastlines as well.”

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Nature must be used to protect ecosystems that provide naturalbuffers to storms, he said, noting that renewed efforts to preservecoastal areas should be consistent with effective state and federallaws.

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In his testimony, Mr. Nutter said the RAA has partnered withother diverse interest groups to create the Americans for SmartNatural Catastrophe Policy Coalition to promote environmentallyresponsible, fiscally sound approaches to natural catastrophepolicy in the interest of public safety.

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The Coalition's guiding principles include:

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o Building Smart. Properties in coastal areasand other high-hazard areas should be built, replaced or repairedaccording to current building standards and codes, reflectingexposure to natural disasters and effective loss-reductionmeasures.

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o Encouraging Safety. Government incentivesneed to promote risk-avoidance and proactive mitigation measures toprotect the public from a broad range of natural disasters,including wind, flood, wildfires and earthquakes.

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o Using Nature. Renewed efforts should be madeto preserve coastal areas, consistent with effective state andfederal laws, using uniform, objective standards–protectingecosystems that provide natural “buffers” to storms.

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o Insuring Based On Risk. Private and publicproperty insurance premiums should be established on the basis ofrisk exposure, including catastrophic risk subject to statelaw.

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o Assuming Responsibility. Rather than shiftingfinancing to the federal government through such means as federalloans or reinsurance, responsibility for state insurance andreinsurance programs that pool natural disaster risks should remainwith states that have established such programs.

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o Targeting Government Assistance. Programsshould focus on people and not on insurance companies.

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Members of the Coalition include: American Rivers, Defenders ofWildlife, Environmental Defense Fund, Friends of the Earth,National Wildlife Federation, Republicans for EnvironmentalProtection, Association of Bermuda Insurers and Reinsurers,American Consumer Institute, Americans for Prosperity, CompetitiveEnterprise Institute, Council for Citizens Against GovernmentWaste, and the National Association of Professional InsuranceAgents.

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