WASHINGTON - The insurance crisis in Indian country has extended to Indian housing, industry leaders meeting here heard.
Kent Paul, chief executive officer of Amerind Risk Management Corp., Albuquerque, N.M. told the legislative conference of the National American Indian Housing Council that while 1,600 insurance companies do business in urban areas, less than 10 did business with tribes prior to Sept. 11, 2001.
And now that number is even lower, he said, less than five.
His own firm, which is basically a self-insured risk pool, now faces a crisis because mortgage agency Fannie Mae and the Alaska Housing Finance Corp. have stopped accepting Amerind hazard insurance on Indian mortgage loans.
That's because Amerind is not licensed or regulated by states, Paul said.
He called this "extremely troubling" and said "access to loans in Indian country could be severely limited."
He urged Fannie Mae to accept Amerind as a viable alternative to traditional insurance. Representatives of Fannie Mae at the conference indicated they hoped a favorable resolution will be forthcoming.
"Capital without insurance is like having no capital at all," Paul told the meeting of more than 200 Indian housing leaders.
Without insurance, he said banks will lose interest in lending in Indian country, and construction will grind to a halt.
The Department of Housing and Urban Development approved Amerind in 1996 as a self-insurance plan for Indian housing authorities. The non-profit has 240 members, covering 400 tribes and 61,000 homes with a replacement value of $65 billion.
Paul said the firm has paid out $125 million in claims and has saved tribes and the federal government $100 million because it is less expensive to provide than traditional insurance.