WASHINGTON–The American Insurance Association said it wants state regulators at their upcoming quarterly meeting to maintain a more even-handed view of whether multistate natural catastrophe funds are necessary.
The current system where insurers manage their own risk is working fine, according to AIA.
The quarterly meeting of the National Association of Insurance Commissioners starts tomorrow in New York.
AIA officials also expect insurance regulators to have more discussions about climate change and global warming, according to David Snyder, AIA vice president and assistant general counsel.
Another issue of critical importance, Mr. Snyder said, is modernizing regulation of personal lines insurance in order to make the system more competitive.
Regarding multistate natural catastrophe funds, Eric Goldberg, AIA assistant general counsel, said the NAIC's Catastrophe Issues Working Group is expected to pick up where it left off following an interim meeting in February and continue discussions about multistate natural catastrophe funds to support insurers in the event of mega-cat losses.
"There is a flawed assumption that the insurance industry lacks the capacity to manage the risk of natural catastrophes," Mr. Goldberg said.
"We are apprehensive about any rush to embrace state catastrophe funds when the case has not been made that the private sector lacks the ability or the capacity to manage natural catastrophe risk, or that a broader governmental role in assuming natural catastrophe risk is necessary," he added.
"We encourage state regulators to be partners with the industry in addressing these matters by supporting insurers' risk-based underwriting and their public advocacy efforts for proactive measures such as stronger building codes and land use controls," Mr. Snyder said.
He said he also is expecting more NAIC discussion of modernizing personal lines regulation during the New York gathering. "It remains critically important for regulators to modernize personal lines regulation by making it more pro-competitive."
Despite this need, he said, "NAIC efforts to modernize personal lines regulation have not produced any significant results."
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