The State of Washington’s Insurance Commissioner’s proposal regarding a state-run, flood insurance program would probably hurt the insurance market and policy holders throughout the state, the Property Casualty Insurers Association of American said in a response.
The Commissioner, Mark Kreidler, said recently that he is going to try to get legislation introduced that would give his office the authority to create a “joint underwriting association” in those situations when the local market is not providing adequate coverage.
He said flood insurance is the current troubled market. Businesses and residents in the Green River Valley, in southern King County, are finding it hard to get adequate coverage. There are concerns about a potentially weak dam, so individuals working and residing below the dam are worried that insurance is not available and may not cover them when they have it.
Federal flood insurance is available for businesses and others, but it is capped, Kreidler said.
But the Commissioner’s proposal comes too soon and goes too far, said the Association’s Assistant Vice President Kenton Brine, in a statement.
“We believe if the Commissioner were to examine the existing market for business flood protection, he would find that insurers are serving the market today,” Brine said. “The insurance marketplace is competitive and capable of meeting the needs of consumers. But passing a law granting broad new powers to the Commissioner to create state-run JUAs that would compete – tax-free – with private carriers could severely harm or destroy an existing, competitive insurance environment, and raise costs for consumers across many lines of insurance.
Brine also noted that the commissioner has tried to get the authority to create joint underwriting associations before, in 2003.
“Establishing a Joint Underwriting Authority â€” or worse â€” passing a law allowing JUAs to be formed at the pleasure of the Insurance Commissioner without prior legislative approval, is jumping the gun,” Brine said in the statement.
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