Insurers Hear Of Coast Protection Upgrades

WASHINGTON–The federal coordinator for Gulf Coast rebuilding briefed representatives of eight insurance companies yesterday on improvements to hurricane protection systems in the region and the status of rebuilding in flooded areas.

Meanwhile, the National Association of Insurance Commissioners scheduled a public hearing for Monday in Mobile, Ala., to address insurance issues in coastal zones.

NAIC President and Alabama Insurance Commissioner Walter Bell as well as state insurance regulators from Florida, Louisiana, Mississippi and South Carolina will preside at the hearing.

Those attending the meeting with coastal rebuilding coordinator Donald E. Powell included representatives of the Travelers Companies Inc., The Hartford, State Farm Mutual Insurance Companies, Liberty Mutual, Zurich North America, American International Group, Allstate Insurance Company and Lexington Insurance Company.

Mr. Powell, who was appointed by President Bush, said the meeting continued “the dialogue we began last year with the insurance industry to provide solid examples of rebuilding progress in the Gulf Coast region. We understand the market realities the insurance industry faces in this region, but their involvement is critical to rebuilding.”

Mr. Powell added that the discussions were aimed at better informing private insurers that since the Gulf Coast storms of 2005 the region has seen “vast and continuing safety improvements” that are “critical to an industry based on risk.”

Mr. Powell said in a statement that he also used the meeting to share information on improvements to hurricane protection systems.

Included in the meeting was a detailed briefing by the U.S. Army Corps of Engineers on the Interagency Performance Evaluation Task Force's (IPET) Risk and Reliability Report.

Information was also provided on IPET's risk assessment model, which characterizes current and future annual flood risk in the area.

The Web site, http://nolarisk.usace.army.mil, enables businesses and homeowners in the New Orleans area to make risk-informed decisions based on their business or home addresses, Mr. Powell said.

“The IPET Web site is a great tool property owners can use as they consider whether or not to rebuild,” Mr. Powell said. “But at the same time we want to drive home the fact that it's good business to rebuild and reinvest in the Gulf Coast region.”

Regarding the NAIC hearing, Commissioner Bell said U.S. Rep. Jo Bonner, R-Ala., is expected to attend.

In addition, representatives from Travelers, State Farm, RenaissanceRe, Municipal Bond Insurance Association (MBIA) and ProtectingAmerica.org are scheduled to provide testimony. Additional witnesses are pending, Commissioner Bell said.

“The intent of the hearing is not to cast blame or disparage insurers for past actions,” Commissioner Bell said.

“State insurance regulators want to work together with the industry and interested parties to achieve stability in the marketplace,” he said. “We face common problems that call for a collective solution.”

Commissioner Bell called the needs of the Gulf Coast area “pressing.”

He noted that rates are rising and consumers are having their policies cancelled or nonrenewed.

“Our goals are to seek input on the steps that we, as insurance regulators, will take to help ensure the affordability and availability of insurance for America's consumers as well as bring stability to the coastal insurance market,” Commissioner Bell said.