Two leading insurance trade groups are opposing an effort in Congress to try to stabilize state insurance markets by creating a new federal program that would pay some claims after catastrophic disasters.
Congressional Democrats are proposing a federal reinsurance program that would cap the amount insurers pay in claims after the largest disasters. The reinsurance program, funded by premiums, would pay the rest.
Democrats led by California Sen. Adam Schiff said state insurance markets are being overwhelmed by extreme weather events and a federal backstop would bring stability.
In a statement Monday, the American Property Casualty Insurance Association, which represents home, automobile and business insurers, said Schiff’s bill misdiagnoses what’s actually driving up insurance prices.
