Rep. Adam Schiff’s INSURE Act proposes a novel solution to the reinsurance market by establishing a federal reinsurance entity to increase capacity. While the intention behind the Act is to provide additional support to the industry, the idea of a government-run program attempting to mimic the functions of a professional reinsurer raises concerns.
The bill seeks to address gaps in coverage and potentially lower premiums for policyholders by creating a new player in the reinsurance space. However, critics argue that a government-backed entity may lack the expertise and efficiency of established reinsurers, ultimately diminishing the value it can provide to the market.
As debates surrounding the INSURE Act continue, it remains to be seen whether a federally-run reinsurance program can truly replicate the success of private reinsurers. While the proposal represents a well-intentioned effort to bolster the industry, questions remain about its effectiveness and potential drawbacks.