Breaking: Travelers and Nationwide Push Coastal Multi Peril Plan

Anita Lee filed this breaking news report that includes comments from Haley Barbour:

Two major insurance companies and two national insurance agent/broker companies are supporting a Coastal wind insurance program that would require federal legislation.

A news release Travelers issued Wednesday morning quotes Mississippi Gov. Haley Barbour, who previously has deferred to the state’s insurance commissioner on such matters.

The plan, first proposed by Travelers CEO Jay Fishman, has support from Nationwide Mutual Insurance Co., the Independent Insurance Agents and Brokers of America and The Council of Insurance Agents and Brokers.

Four major points in the plan:

• The federal government would sell at cost to insurance companies coverage that would cover their catastrophic losses.

• Wind coverage for customers in coastal zones from Texas to Maine would be regulated by a federal body working with uniform rules, while states would continue to regulate other portions of insurance policies.

• Approved standards and wind-risk models would be used to set rates, which would be adjusted if models and actual experience conflict.

• Local and state governments would have incentives to adopt federal guidelines and land-use plans for stronger construction, with premium discounts for homeowners who build to those standards.

“As governor of a Gulf Coast state, I’m encouraged by the principles outlined with these four pillars,” Haley Barbour said in the news release. “With the projections of risk from future hurricanes, I’m committed to working with my fellow governors, Congress and others to find solutions to the current insurance market issues. We should not wait for the next major storm before solving the substantial challenges of coastal insurance availability and affordability.”