Property and Casualty Insurance (C) Committee
Property and Casualty Insurance (C) Committee Page
Joint Executive (EX) / Plenary Committee Summary Report
Fall 2009 Meeting Summaries Index

The Property and Casualty Insurance (C) Committee met Sept. 23, 2009. During this meeting, the Committee:

• Heard a presentation on cost-saving auto safety devices. The presentation focused on the distractions drivers face as their attention is diverted away from the primary task of driving due to other visual, cognitive, auditory or biomechanical activities. The use of wireless devices is prevalent, and it is believed that at least 25% of auto accidents occur due to distractions. Currently enacted legislation to curtail cell phone and texting abilities has not helped. and legislation alone will not solve the problem. Technology is advancing so downloads to GPS-enabled phones would detect movement and block incoming/outgoing calls/text messages. Another innovation is a crash-avoidance application like a location-based services platform that alerts drivers when approaching signaled intersections. The National Transportation Safety Board plans to hold a Distracted Driving Summit on Oct. 31 and Nov. 1, and it will be streamed online. It is anticipated there will be action following the summit.
• Heard a presentation on an Enhanced Homeowner Insurance Policy by Nationwide. The recommendation attempts to include wind and flood perils in an all-inclusive homeowners policy and is believed to eliminate the uncertainty consumers have in knowing what is covered in their policies. After Hurricane Katrina, there were many problems ascertaining if a home was destroyed by wind or flood and whether there was coverage. The federal government would help reinsure the policies written.
• Heard an update on the report of the catastrophe model feasibility study. The report will include the feasibility of building a national hurricane model and a national earthquake model. The model would be of commercial grade, comparable to vendor models. Insurers would be able to access the model and run analyses on a secure, Web-based system. The pilot states study group did not make a formal recommendation for action in its report. Instead, the study group’s final report included sections regarding: 1) the need, regulator use and benefits of a national catastrophe model; 2) potential ways a model could be housed; 3) issues related to data collection and confidentiality; 4) a description of how a model might be built, including timeline, inputs, outputs and costs; 5) regulatory and political issues; and 6) alternatives to building a model. The final report is currently being evaluated and considered by the Internal Administration (EX1) Subcommittee. At its meeting Sept. 19, the Subcommittee decided to defer action on the feasibility report to investigate another possibility that surfaced late in the process. The Subcommittee might take up the study in late 2009 or 2010, but has no immediate plans to consider a proposal associated with the NAIC 2010 budget.
• Adopted a recommendation to change the Title Insurance Issues Working Group to the Title Insurance Issues Task Force.
• Heard an update on credit-based insurance scoring activity. The Committee and the Market Regulation and Consumer Affairs (D) Committee plan to hold a joint meeting later today and are expected to consider revising the definition of an advisory organization so as to regulate entities providing credit-base insurance scores. The two committees may also split their focus, so the Property and Casualty Insurance (C) Committee would review the rating aspects associated with credit-based insurance scoring, and the Market Regulation and Consumer Affairs (D) Committee would concentrate on consumer concerns on the use of credit-based insurance scores due to the current economy and its impact on credit-based insurance scores.
• Adopted the revised A Consumer’s Guide to Homeowners Insurance as presented by the Consumer Guides Working Group.
• Heard about exposure from Chinese drywall that was imported into the United States between 2004 and 2007 that is causing an impact in property damage and bodily claims. The drywall has been installed in over 100,00 homes in 21 or 22 known states, and the Consumer Product Safety Commission has recorded over 600 reports of defects. There are costs to repairing homes, increased health costs and legal fees. The total estimated costs for current and future defects including health related issues range from $15 billion to $25 billion. The Committee agreed it is necessary to produce a report covering the anticipated claim issues and coverage implications, as some carriers are beginning to submit endorsements excluding coverage from homeowners policies.
• Reviewed proposed 2010 Committee charges and asked members to review them in detail and provide comments as necessary.
• Adopted reports of the following task forces and working groups: Casualty Actuarial and Statistical Task Force, Surplus Lines Task Force, Workers’ Compensation Task Force, Advisory Organization Examination Oversight Working Group, Catastrophe Insurance Working Group, Catastrophe Reserve Working Group, Consumer Guides Working Group, Crop Insurance Working Group, Earthquake Study Group, Terrorism Insurance Implementation Working Group, and Title Insurance Issues Working Group.