Fla.’s McCarty Retains Focus on Cat Issues

Apr 1, 2008

Insurance News Net

Copyright:    A.M. Best Company, Inc.
Source:    BestWire Services
Wordcount:    323

Representing a state known for both its number of hurricanes and a booming population, Florida Insurance Commissioner Kevin McCarty has kept a spotlight on natural catastrophe issues at the National Association of Insurance Commissioners as chairman of both the Catastrophe Insurance Working Group and the Property and Casualty Insurance Committee. He spoke with BestWire at the spring meeting of the NAIC, for which he was the host commissioner.

Keeping his focus on catastrophe issues, McCarty held a brief hearing that returned a white paper on creating a comprehensive natural catastrophe plan to the NAIC agenda. McCarty described the paper as a framework for further discussion on the respective roles and responsibilities of individuals, insurers and local, state and national governments.

McCarty said the way federal government responds to catastrophic natural events — after the fact — is “not appropriate, is wasteful and not prudent.” The NAIC previously backed H.R. 3355, the Homeowners Defense Act, which would create a federal catastrophe backstop.

McCarty spoke proudly about the My Safe Florida Home program, another subject of the working group, which teaches Floridians how to strengthen their homes against hurricanes. The program offers free wind inspections by qualified hurricane mitigation inspectors to eligible homeowners.

“We know there’s going to be a catastrophe, and the more that you do to prevent the losses on the front end, by retrofitting homes, stronger building codes, code enforcement and mitigation, I think the better off society is as well as the insurance industry and the individual. So everyone wins,” McCarty said.

McCarty also spoke about the new U.S. Treasury Department report endorsing a federal insurance regulator. He said he was disappointed by the recommendation for an optional federal charter.

“We do need to modernize our regulatory framework across sectors,” he said. However, “An optional federal charter has not been a good design for banking. It is a worse design for insurance.”

(By Sean P. Carr, senior associate editor, BestWeek: Sean.Carr@ambest.com)