<HTML><BODY style="word-wrap: break-word; -khtml-nbsp-mode: space; -khtml-line-break: after-white-space; "><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><A href="http://www.latimes.com/news/printedition/front/la-fi-insure5oct05,1,5910087.story?coll=la-headlines-frontpage"><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 14px;"><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">http://www.latimes.com/news/printedition/front/la-fi-insure5oct05,1,5910087.story?coll=la-headlines-frontpage</SPAN></FONT></SPAN></FONT></A></DIV><P style="margin: 0.0px 0.0px 21.0px 0.0px"><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 14px;"><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">A LONG ROAD TO RECOVERY</SPAN></FONT></SPAN></FONT></P><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 14px;"><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">Change Sought to Cover Losses</SPAN></FONT></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 14px;"><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">Mandatory national insurance for disasters such as hurricanes and earthquakes is getting a serious look. Critics call it a bailout for carriers.</SPAN></FONT></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 14px;"><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">By David Streitfeld</SPAN></FONT></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 14px;"><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">Times Staff Writer</SPAN></FONT></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">October 5, 2005</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">Hurricanes Katrina and Rita exposed such major shortcomings in the nation's insurance system that regulators from several states are drawing up plans for a national catastrophe insurance program.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">Its backers argue that without a major overhaul, the current system will once again perform miserably in a big California quake, a major terrorist attack or storms that echo this season's in size and intensity.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">Details of the program are to be worked out at a summit in San Francisco next month led by California Insurance Commissioner John Garamendi and his counterparts from New York and Florida. One strong possibility is that the program will be mandatory for all U.S. homeowners in the same way liability insurance is required for car owners.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">That would eliminate the biggest problem with current forms of disaster insurance: It's specialized and often expensive, so few buy it. That keeps the premiums high, which keeps it unpopular. When a disaster hits, only a small percentage of people are covered.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">With a national program, premiums would vary according to risk areas, with Gulf Coast residents and Californians paying more than, say, Idahoans or Nevadans. The insurance companies would administer the program and, in all likelihood, the federal government would guarantee it.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;">The proposal, which would have to be approved by Congress, is drawing fire from consumer advocates, who fear it would be nothing more than a massive bailout of the insurance industry.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><FONT class="Apple-style-span" face="New York" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" size="3"><SPAN class="Apple-style-span" style="font-size: 12px;"><BR class="khtml-block-placeholder"></SPAN></FONT></DIV></BODY></HTML>