Crist rebuffed on catastrophe insurance

WASHINGTON, April 12 (UPI) -- The Bush administration rebuffed Florida Gov. Charlie Crist in his push for a national catastrophe insurance fund to rein in homeowner premiums.

State or federal attempts to limit consumer costs are "well intended but have the side-effect of undermining the private market," the president's Council of Economic Advisers Chairman Edward Lazear told the Senate Banking Committee.

The private market works well and "a federal backstop would mean that all taxpayers nationwide would subsidize insurance rates for the benefit of a relatively small group of people in high-risk areas," Lazear said.

Crist testified the federal government already backed up the insurance system in an inefficient and unplanned way by doling out billions of dollars of aid after massive storms, the (Fort Lauderdale) South Florida Sun-Sentinel reported.

The Republican governor lashed out at the insurance industry -- citing estimated profits of $60 billion last year -- while advocating support for a fund to spread risk nationwide and make premiums affordable in storm-prone areas, "thus strengthening our insurance markets."