The Federal Insurance Office (FIO) should have the “ability to immediately estimate exposures related to catastrophic events” and provide it to the Federal Government.
That’s according to the “vision” for the FIO spelled out in the proposed 2014 U.S. budget released today.
“This proposal represents a protectionist and economically destructive tax that would benefit a small group of domestic insurance companies at the expense of U.S. consumers,” said R Street Senior Fellow R.J. Lehmann. “Its ultimate effect would be to drive reinsurance capital – so sorely needed in catastrophe-prone states like Florida, Louisiana, Texas and California – out of the country.
“In addition to making reinsurance more costly and limiting access to the global reinsurance industry, which allows catastrophe insurance to function by pooling a wide variety of different kinds of risks from around the world, the proposal is unnecessary,” Lehmann added.