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Listed below are some excerpts of insurance related suggestions or recommendation from the report. The Task Force Report was released 10/19/2006.

• Investigate the Katrina claims practices of insurance companies that contract with the National Flood Insurance Program. The National Flood Insurance Program (NFIP) allows insurance companies to sell flood policies and adjust flood claims that are financially backed by federal taxpayer dollars.  Insurance company adjusters have an obvious conflict of interest when deciding whether claims should be billed to the federal flood insurance program or to the insurance companies that employ them, train them, and advise them on the interpretation of their policies.  

• State Farm, Nationwide, Allstate, and other insurers paid hundreds of thousands of wind claims inland, where they could not possibly blame the storm surge, but denied wind claims near the coastline, where winds were stronger and water also was present. 

• Cori and Kerri Rigsby, who adjusted claims under a contract with State Farm, have revealed that they were instructed to pay NFIP claims as quickly as possible, while refusing to acknowledge any evidence of wind damage.  The sisters also claim that State Farm and its contractors revised engineering reports and coerced engineering firms to assign all damages to flooding, despite hours of hurricane winds before the storm surge.

• Repeal the federal antitrust exemption as it relates to price-fixing, bid-rigging, or market allocation in the market for property insurance.  The Katrina Task Force seeks to prohibit commercial insurers in the market for property insurance from any form of price-fixing, bid-rigging, or market allocation.  It seeks to prohibit insurers in the market for property insurance from engaging in concerted activity to deny compensation to policyholders through restrictive and unwarranted interpretations of policies.  It also seeks to prohibit concerted activity by insurers in the market for property insurance to limit the scope of policies and compensation.

• Establish stronger federal oversight of property insurance practices.  Congress should establish federal authority to conduct oversight of property insurance practices.  When insurance companies stop issuing policies in New York because of claims in Mississippi and Louisiana, the industry cannot reasonably claim that property insurance is not interstate commerce.  The government has assumed responsibility for insuring risks that the insurance industry refuses to cover, such as flooding. The federal government also provides disaster assistance to offset the uncovered losses of individuals, businesses, and communities.  Since federal taxpayers are forced to fill the gaps left by property insurance, Congress and the federal government have an obligation to perform diligent oversight of the industry.

• Establish all-perils disaster insurance coverage backed by the federal government.  The segmented insurance market leaves gaps in coverage that result in widespread uninsured losses from natural catastrophes, especially from flooding, earthquakes, and other perils commonly excluded by private property insurance.  Private insurers can shift responsibility for hurricane losses to property owners, NFIP, and relief programs by attributing damages to water rather than wind.  Any effort to provide a federal backstop for insurance losses should insist on elimination of the exclusions and gaps in coverage.  Rather than providing relief aid after the fact, the federal government should establish a reinsurance program that assesses the cost of catastrophic risks and collects premiums before such events occur.   The program would provide reinsurance to the all-perils insurance coverage and would be triggered by large-scale natural catastrophes."

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