WASHINGTON--The American Insurance Association said it willlobby Congress over legislation concerning affordable propertyinsurance, an optional federal charter for insurers andcomprehensive flood insurance reform.

Mark Racicot, AIA's president, said that "2008 is shaping up tobe another active year for the property-casualty industry."

Mr. Racicot said one topic "likely to receive substantialattention from lawmakers is property insurance, especially forthose homeowners living in coastal areas that have been impacted byrecent hurricanes."

In making that comment, Mr. Racicot was reiterating what Sen.Chris Dodd, D-Conn., chairman of the Senate Banking Committee, andRep. Barney Frank, D-Mass., chairman of the House FinancialServices Committee, said in separate press briefings last week.

"This is an issue of particular importance for our association,"Mr. Racicot said. He said the AIA is committed to finding aworkable solution for insuring our country against losses fromnatural catastrophes but will not support some of the legislativeproposals now being discussed, including creation of federalcatastrophe funds.

"While these mechanisms may be attractive, they also promoteunwise and unsafe property development and leave problematiccost-drivers for insurers and policyholders unresolved," Mr.Racicot said.

He said Congress should not create additional mechanisms "thatwould interfere with the private market's ability to protecthomeowners and businesses."

Regarding the OFC, he said the AIA and other supporters "willcontinue to build on the momentum generated with the introductionin 2007 of bi-partisan bills in both the House and the Senate."

He said that creating an OFC "would provide consumers all thebenefits of an efficient, modern regulatory structure throughincreased competition and allow the U.S. insurance industry tocompete more equitably on a global basis."

On the issue of reauthorizing the National Flood InsuranceProgram, he said the AIA is a "strong proponent" of comprehensiveflood insurance reform and will urge Congress to complete action ona NFIP reauthorization bill this year.

But, he said the AIA "will steadfastly oppose" any inclusion ofwindstorm coverage to the NFIP, as included in H.R. 3355,legislation passed by the House Nov. 8.

"Doing so would break the NFIP's already burdened financialsystem and would encourage building in hurricane-prone regions,putting more people and property in the path of devastatingstorms," Mr. Racicot concluded.