More Understanding To reduce future losses, Dr. Reinhold stressed that there must be a better understanding of damage risks for current roofing products, and for improving products and producing wind ratings that more accurately predict performance in hurricanes and other severe wind events.
Economists Warn—
“This study just begins to address the issues associated with shingle performance in high winds,” said Dr. Reinhold. “More research is needed both in terms of field investigations for events, where new wind-rated products are exposed to higher wind speeds, and in a controlled environment such as the new IBHS Research Center, where effects of aging and wind speed can be investigated on demand for a variety of products.”
Maiden Hearing Dr. Reinhold presented the preliminary findings of the study at the recent National Hurricane Conference in Orlando. The full version of the study is available in the summer issue of IBHS’ Disaster Safety Review.
Mary E. Travis, CIC has joined the team at Insurance Marketing Solutions, Houston, as vice president of contract underwriting, effective Aug. 23,
2010.
Travis has been a lead commercial underwriter in the Houston area for more than 20 years, the last 10 years as top producer and area vice president for Leicht General Agency.
Mary E. Travis
Travis will continue to work with retail agents and insurance companies.
WASHINGTON—The Coalition for Competitive Insurance Rates (CCIR) produced new data which it says confirms fears that the nation’s consumers can expect to pay billions of dollars in higher insurance premiums if Congress passes legislation that increases taxes on foreign-based insurance companies. In an update to a study published in 2009, economic researchers at The Brattle Group have determined that HR 3424, introduced by Rep. Richard Neal (D-MA) would cost consumers even more than initially feared.
The study was authored by Dr. J. David Cummins, Dr. Michael Cragg, and Dr. Bin Zhou. Cummins is the Joseph E. Boettner Professor of Risk Management, Insurance and Financial Institutions at the Fox School of Business at Temple University and the Harry J. Loman Professor Emeritus of Insurance and Risk Management at the Wharton School at the University of Pennsylvania. Cragg is principal and Zhou is senior consultant at The Brattle Group, Cambridge, Mass.
The study found that HR 3424
would
• Cost consumers an additional $11
billion to $13 billion per year to
maintain their current insurance
coverage;
Off-Shore Re Disaster-prone states rely heavily on the backing of foreign-based reinsurers to protect them. For example, more than 60% of the claims from Hurricanes Katrina, Rita, and Wilma came from foreign insurers and reinsurers. The reductions in capacity and increases in cost predicted by the Brattle Group study could leave these areas even more vulnerable than they are now.
Bad Idea in the Best of Times “Adoption of such legislation would be imprudent under the best of conditions, and current conditions are anything but good. The risks due to natural catastrophes have been growing for 20 years, and that trend is likely to continue because of the development that has occurred in areas prone to earthquakes and floods,” concluded the Brattle Group researchers. “ Moreover, the ability of the government and private industry to absorb shocks still remains tentative due to an uncertain economic recovery, because of a financial crisis that stems from poor risk management in the banking and mortgage industries. Thus this is an especially poor time to impose a tax that would further jeopardize our economy’s capacity to manage risk.” Since the release of the 2009 Brattle Group study, opposition to HR 3424 has increased—more than 100 independent groups and individuals have written letters to Congress opposing this legislation. Trade experts, economists, consumer advocates, state insurance commissioners and business owners around the country agree that the HR 3424 is an ill advised piece of legislation.
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