Who will write flood insurance at rates that are not actuarially sound? Can more efficient risk assessment really be significant enough to enable rates below actuarially sound rates? And the competition will rush to lower rates to be “competitive”? Until the first hurricaine hits! This should be interesting.
Why is legislation needed to allow private flood insurance? Is there some existing provision of West Virginia law that prohibits insurance companies from selling flood insurance? My understanding has been that the reason most private insurers don’t want to sell flood insurance for properties in flood hazard zones is because they don’t want the risk, not because they’re not legally permitted to sell it. But perhaps I’m missing something.
Pete,
I was thinking the exact same thing. I hope someone comes up with a good reason otherwise the people of W. VA are wasting a lot of money on very ignorant legislators trying to pass bills that aren’t required.
Starky- Capital markets will write the business due to their lower cost of capital than traditional reinsurers. Refer to the MTA cat bond deal this past summer.
Who will write flood insurance at rates that are not actuarially sound? Can more efficient risk assessment really be significant enough to enable rates below actuarially sound rates? And the competition will rush to lower rates to be “competitive”? Until the first hurricaine hits! This should be interesting.
Why is legislation needed to allow private flood insurance? Is there some existing provision of West Virginia law that prohibits insurance companies from selling flood insurance? My understanding has been that the reason most private insurers don’t want to sell flood insurance for properties in flood hazard zones is because they don’t want the risk, not because they’re not legally permitted to sell it. But perhaps I’m missing something.
Pete,
I was thinking the exact same thing. I hope someone comes up with a good reason otherwise the people of W. VA are wasting a lot of money on very ignorant legislators trying to pass bills that aren’t required.
Starky- Capital markets will write the business due to their lower cost of capital than traditional reinsurers. Refer to the MTA cat bond deal this past summer.