Catastrophe coalition looking out for public, not reinsurers
Your recent editorial, “Who’s really opposing national disaster plan?” (May 13), mischaracterizes the interests and motivations behind the organizations that comprise Americans for Smart Natural Catastrophe Policy. The coalition includes environmentalists, consumer groups, taxpayer advocates, free-market groups, fiscal conservatives, and, yes, representatives of the reinsurance industry.
To say the least, it’s a coalition of strange bedfellows. In the past two months alone, my organization has taken starkly different positions than other coalition members on everything from wildlife policy to the desirability of insurance rate regulation. But all coalition members
agree that creating national windstorm insurance programs and federally subsidized reinsurance funds would represent terrible public policy errors. Government-run reinsurance or wind insurance will cost the Treasury hundreds of billions of dollars, stimulate development in environmentally sensitive areas, displace a productive private industry and endanger lives.
All of the members participate out of their own interests and ideas not because they want to carry water for the reinsurance industry. All of the members realize a simple fact: Nature causes hurricanes and floods while human activity causes hurricane and flood damage. That’s why we
also support proactive approaches to mitigate disasters to make communities disaster resistant.
In the long run, effective mitigation and sound building standards will do more to make America safe than government-supported reinsurance ever could. Florida’s own misguided insurance laws, which the governor and Legislature made worse with their 2007 reforms, threaten the state’s
fiscal future. In fact, many of the proposals that the Senate has so soundly rejected amounted to little more than pre-funded bailouts for the unsustainable Citizens/Hurricane Catastrophe Fund combination that sits at the root of Florida’s own insurance mess.
We agree that the nation has to do more to confront disasters and remain sympathetic to insurance cost issues. But none of us thinks that a new expensive, unworkable, burdensome, destructive government program serves the public interest or the common good.