In a strong message to the US Senate Committee on Banking, Housing, and Urban Affairs, the Reinsurance Association of America (RAA) has called for policies that bolster a resilient, competitive private insurance market and reject expanded government-run insurance programs.
In a formal letter submitted by RAA President Frank Nutter during the committee’s hearing on “Examining Insurance Markets and the Role of Mitigation Policies,” the association outlined five key policy recommendations aimed at effectively managing the increasing risks associated with natural disasters.
The letter, addressed to Committee Chairman Senator Tim Scott and Ranking Member Senator Elizabeth Warren, emphasised the industry’s commitment to finding sustainable solutions.
“Rising insurance costs are driven by escalating natural hazards, inflation, and lawsuit abuse—not a failure of private markets,” said Nutter. “Rather than expand government insurance programs, we must build a smarter, resilient, and risk-aware system.”
RAA’s first policy recommendation is about preserving state regulatory authority. The organisation suggests that insurance regulation should stay at state level in order to address regional risks effectively.
The association also recommends the promotion of resilient construction and mitigation. It supports the inclusion of resilience incentives in federal spending, for example Senator Scott’s “Repeatedly Flooded Communities Preparation Act”, and calls for reforms in the National Flood Insurance Program (NFIP) to boost private market participation.
Its third recommendation involves the acceleration of the Community Disaster Resilience Zones (CDRZ) Act implementation to prioritize vulnerable communities, and enhance weather and risk data capabilities through NOAA, NASA, and USGS.
The RAA also supports bipartisan legislation, including Senator Thom Tillis’s Disaster Mitigation and Tax Parity Act, to remove tax barriers on pre-disaster mitigation funding and encourage private investment via tax credits, bonds, and public-private financing mechanisms.
Finally, the RAA recommends addressing the insurance protection gap through the development of innovative products and partnerships aimed at expanding insurance access and reducing taxpayer exposure to uninsured losses.
The RAA also warned against the establishment of federal property insurance or reinsurance programs. It pointed to the NFIP’s historical debt burden, which exceeds $22 billion, citing it as an example of inefficiency and moral hazard.
It also stated that subsidised insurance distorts markets and undermines mitigation efforts.
“Expanding federal insurance would repeat past mistakes,” Nutter added. “Our industry is committed to partnering with policymakers to create forward-thinking solutions rooted in sound risk management and private-sector innovation.”
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