Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers (ABIR), recommended that the National Association of Insurance Commissioners’ (NAIC) to focus on six specific US National Flood Insurance reforms.
To improve flood insurance markets, the ABIR suggests that there is continued support for the Ross-Murphy bill, H.R. 2901; saying the NAIC’s statements in support are important to demonstrate that private insurance markets can well serve consumers under appropriate state regulation.
It also recommends engagement with members of the US House Financial Institutions Committee, which has begun work on NFIP reauthorisation legislation and is interested in advice on how to expand consumer flood insurance markets.
Other recommendations include a move from the current NFIP opaque subsidies, a continuation along the current NFIP glide path to risk based pricing, the purchase of private reinsurance for the NFIP, and a focus of federal resources on designing and building in resilience in infrastructure and creating incentives for consumers to protect themselves via pre-event insurance and risk mitigation rather than over-reliance on post event disaster aid.
Kading made the statement before the NAIC Property and Casualty Committee on April 5 in New Orleans, LA. It was made as the US Congress begins to considering reauthorisation legislation.
He said: “These measures collectively would increase the purchase of flood insurance in the United States and provide consumers with more comprehensive coverage and with a choice of flood insurance providers.
“We favour policy changes that remove regulatory red tape to allow private insurers to voluntarily write more flood insurance; and that encourage the US National Flood Insurance Program (NFIP) to continue on a necessary and essential pathway to risk based pricing that will encourage transfer of risk to private insurance markets.”
ABIR members, and other Bermuda re/insurers, underwrite substantial amounts of catastrophe reinsurance around the world.
In the UK, ABIR members and other Bermuda insurers have contributed just under 20 percent of the costs of the late in the year 2015 flooding and in the the US, ABIR members, and other Bermuda re/insurers are estimated to have borne 16 percent of the losses from Hurricane Sandy, much of this in commercial flood claims.
ABIR, Bradley Kading, NAIC, Flood reforms, Weather, Bermuda, North America