Traveler’s Insurance “4 Pillars” of strength

The “Four Pillars” include:

1. A stable and consistent regulatory environment, with a uniform set of rules applied to named wind coverage for coastal zones from Texas to Maine. This portion of the homeowner policy would be regulated by an independent federal body, with the remainder of the policy still regulated by the states.

2. Transparency in calculating insurance premiums, with risk-based, actuarially sound rates using approved standards and wind risk models, and a rating calculation mechanism to be applied if models and actual experience become misaligned over time.

3. Federal reinsurance mechanism for extreme events (such as hurricanes causing losses several times greater than those arising out of Hurricane Katrina), with the reinsurance made available to insurers at cost so there would be no taxpayer subsidy, and the savings passed directly to customers.

4. Encouraging stronger homes through federal guidelines for appropriate building codes and land use planning, with incentives for state and local adoption, plus enhanced construction technology and meaningful premium credits for customers who make their homes less vulnerable to wind damage.

“We believe these comprehensive principles provide the needed framework to assist America’s coastal families in preparing to repair, rebuild and recover from the aftermath of named storm catastrophes,” said Fishman. “We’ve held extensive discussions with key members of Congress, public officials at the state and local level, insurance agents and other industry leaders and appreciate the wide range of participants who recognize this as a viable solution to a challenging market problem.”

“As governor of a Gulf Coast state, I’m encouraged by the principles outlined with these four pillars,” said Mississippi Governor Haley Barbour. “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.”