A decision on whether to raise rates by up to 10% next year in the riskiest areas of Galveston and Harris County will be made at the board’s August meeting.
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R.J. Lehmann
While state-controlled foreign banks will be permitted to expand their operations in the United States and free to make loans to U.S. small businesses, community-oriented, nonprofit credit unions are still constrained.
The successful placement amply demonstrate private sector interest in catastrophe risk, and it comes at a good time for Citizens, which is losing some of its power to lay “hurricane taxes” on the private market.
The Mississippi Windstorm Underwriting Association, which has not raised wind pool rates since 2006, is retaining $71.5 million of risk this year, up from $51.5 million in 2011.
According to TWIA’s own actuaries, there is a 27 percent chance it would not be able to cover all of its liabilities during the 2012 hurricane season if it doesn’t move to raise rates.
Bill sponsor Rep. Fred Jordan has held the bill for reconsideration, meaning it could still come back to the House floor.
Iowa State University economist Bruce Babcock discusses the perverse incentives, taxpayer waste, and environmental harm caused by federally subsidized crop insurance.
In other flood insurance news, Sen. David Vitter’s bill to extend the flood program through Dec. 31 may get a vote in the Senate the first week of May.
The state-run insurer has asked staff to review whether it is allowed to charge full actuarial rates to new policyholders, while continuing to be bound by a 10% rate cap on renewal business.
The measure would offer a bit more time to finish work on long-term reforms to the National Flood Insurance Program before the end of the 112th Congress.
