- The Washington Times - Tuesday, October 4, 2005

SEC eases rules on insurance companies to raise capital

NEW YORK (Reuters) — Insured losses from Hurricane Katrina property damage have reached $34.4 billion, the insurance industry’s official statisticians said yesterday, confirming it as the most costly disaster in U.S. history.

The damage from Katrina exceeded the $20.8 billion in inflation-adjusted losses from Hurricane Andrew in 1992.

The Insurance Services Office said it would do another survey in 60 days because damage costs could rise further.

The costs of Hurricane Rita, which followed Katrina in September, will be calculated separately.

The report doesn’t cover losses to utilities, agriculture or oil drilling. Flood damages, which are covered by federal flood insurance, aren’t included, either.

Wind and storm damage to private property, as well as damage to cars and commercial property, business interruptions and living costs are included in the report, according to Chris Guidette, a spokesman for the Insurance Services Office.

The office is an information services company that provides actual property claims information to the insurance industry, governments and lenders.

The spokesman said the figures include 1.6 million insurance claims filed in six states: Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia.

Losses in Louisiana totaled $22.6 billion in damages and 900,000 claims filed. “New Orleans bore the brunt of the hurricane’s fury,” the company said.

Mississippi was second with $9.8 billion and 490,000 claims, Alabama third with $1.3 billion and 123,000 claims, and Florida fourth with 468 million and 110,000 claims.

Tennessee and Georgia sustained smaller damages.

More than 75,000 boats and yachts were damaged or destroyed by Katrina, with a total cost of nearly $2 billion alone, the spokesman said.

The dollar totals are considered estimates until the claims are settled, the ISO said.

Yesterday, the Securities and Exchange Commission said it was easing rules for insurance companies to raise capital, responding to concern that the billions of dollars of losses from Katrina and Hurricane Rita could make it harder for insurers to pay victims’ claims.

The SEC said it will, among other things, allow publicly traded insurance companies to submit reduced paperwork for registering new issues of stock with the agency.

“The SEC remains committed to doing everything possible for the victims of Hurricane Katrina and Hurricane Rita,” agency Chairman Christopher Cox said. “We will work to ensure that our regulatory processes do not interfere with market access.

The SEC will do what it can to see to it that every victim’s insurance has the capital to back it up, and that there are no unnecessary delays in paying claims” due to a lack of available money.

The changes will be in effect through Dec. 1.

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