ABA House Passes Disaster Insurance Measures
Posted Feb 16, 2009 03:34 pm CST
The ABA’s policy-making House of Delegates this morning passed a series of resolutions aimed at improving insurance protection for individuals and companies affected by natural disasters.
The measures were put forward by the Tort Trial & Insurance Practice Section. They were opposed by the Section of Real Property, Trust & Estate Law, which maintained that the House of Delegates was not sufficiently educated on the issues to pass judgment on the measures, and that they would make rebuilding after a catastrophe much more difficult and expensive.
They included measures that:
• Recommend federal, state and territorial governments enact legislation eliminating any prohibitions or restrictions on participants in the private insurance and reinsurance markets from making available broadened insurance protection for property damage arising from storms, including damage from wind, wind-driven rain and flood caused by storm surge, but excluding damage arising from other types of floods.
• Urge Congress to address the consequences of natural catastrophes by strengthening the financial infrastructure and developing programs that increase availability of affordable insurance in areas highly-exposed to catastrophes, while not competing with the private market.
• Urge the federal government to take steps to encourage capital markets to finance catastrophic risks by: a) undertaking a study through the U.S. Treasury Department to determine what changes in federal laws and regulations would reduce barriers to the issuance of catastrophe (CAT)-linked securities in the United States; and b) enacting legislation as needed to encourage the issuance of catastrophe (CAT)-linked securities.
• Urge the federal government to address the liquidity needs of individuals and businesses in the aftermath of future natural catastrophes to reduce some of the losses by residents affected by the catastrophes.
• Urge state, territorial and local governments to use specific tools to mitigate losses from future mega-catastrophes to ensure the ongoing availability and affordability of insurance for natural disasters.
• Urge the federal government to use specific tools to mitigate losses from future mega-catastrophes by influencing building codes and land-use in certain situations.
• Recommend state and territorial governments adopt standards for handling residential and small business insurance claims for property damages resulting from hurricanes or storms.