Office of National Insurance: Hearing

Creating an Office of National Insurance will be one of the topics addressed at a Congressional hearing focused on capital markets regulatory reform that is scheduled for next Tuesday October 6 before the House Committee on Financial Services. Other topics to be discussed at the hearing are strengthening investor protection and enhancing oversight of private pools of capital. Earlier this June the Obama administration called for establishing an Office of National Insurance (ONI) within the Treasury department as part of its plan to overhaul financial regulation. The ONI would monitor the industry and advise on policy issues. Draft legislation that would establish a federal insurance office was introduced yesterday by Rep. Paul Kanjorski, D-PA. The draft bill follows earlier legislation introduced by Kanjorski  in May  as well as the introduction  last April of the National Insurance Consumer Protection Act (H.R. 1880) by Rep. Melissa Bean, D-IL and Rep. Ed Royce, R-CA — both bills that would establish an ONI. Check out I.I.I. information on regulatory modernization and optional federal charter.

Samoa and Sumatra Earthquake Events

At last count, the magnitude 8.0 earthquake that triggered a tsunami that struck the Samoa Islands region on Tuesday has left over 140 dead, destroyed several villages and caused severe damage in Pago Pago, the capital of American Samoa. President Obama has declared American Samoa a disaster area. Meanwhile a magnitude 7.6 earthquake that occurred off the coast of the Indonesian island of Sumatra on Wednesday caused significant property damage in Padang, the city closest to the epicenter. Reports estimate at least 500 people were killed and thousands more have been injured or trapped in damaged buildings. The earthquakes come just days after Typhoon Ketsana hit the Philippines. While it’s too soon to know the extent of the economic loss from these global catastrophes, it’s important to note the cost in human lives. According to data from Swiss Re’s Sigma, in 2008 240,500 people worldwide died or were unaccounted for due to natural catastrophes or man-made disasters. In terms of the number of victims, 2008 was one of the worst years since 1970. The most affected region was Asia. Swiss Re notes that given the rapid development of the Asia Pacific region, natural catastrophes are having more of an impact on the insurance industry. Moreover, many parts of Asia, especially along the coastlines, are highly exposed to natural hazards such as earthquakes, tsunamis, volcanoes, tropical cyclones, floods, hail, snow and thunderstorms. Insurance protection against these risks  has remained at very low levels in Asia, and as a result individuals, corporations and governments typically bear the brunt of the uninsured catastrophe losses. Swiss Re suggests that government protection schemes and public private partnerships, successfully implemented in other regions in recent years, could lead to better catastrophe protection in Asia in future. Check out I.I.I. facts and stats on global catastrophes.