ORLANDO, Fla.—Whether a federal insurance office would be beneficial is an “it depends” situation, an insurance executive told attendees at the Public Risk Management Assn.'s annual meeting.

Patricia H. Roberts, president and CEO of Riverside, Conn.-based Genesis Underwriting Management Co., a unit of General Re Corp., told public-sector risk managers that she gets “a little nervous” about federal insurance regulation and wonders, “What would the regulation be like?”

Ms. Roberts said she would “love” to see the creation of a system of optional federal charters for insurers. But if a federal insurance office was just another layer of regulation, costs would be driven up for everyone, she said.

She offered her comments during a panel discussion about the state of the insurance industry during the Alexandria, Va.-based PRIMA's annual meeting this month in Orlando, Fla.

The proposed Office of National Insurance, which “is really a data-gathering advisory function” that could provide better federal level decisionmaking, said fellow panelist Michael F. Klein, senior vp of business insurance and president of Travelers Cos. Inc.'s middle-market business in West Hartford, Conn. Congressional debate over financial services regulatory reform has demonstrated a lack of knowledge about the property/casualty business, he said.

Turning to the recession, Ron Hayes, whose term as PRIMA president ended on the last day of this year's conference, asked the panelists if the economic downturn was leading to an uptick in insurance fraud. Mr. Hayes also is risk manager of the Calcasieu Parish Public Schools in Lake Charles, La.

“We are not seeing an increased fraudulent claim count,” responded Patrick M. Gallagher, managing director of worldwide property and casualty for Gallagher London, a unit of Arthur J. Gallagher & Co.

Ms. Roberts said she has been seeing more commercial insurance claims, but they reflect poor maintenance rather than fraud.

The state of the economy means this year's renewals are about doing more with less, Mr. Gallagher said. Public-sector risk managers are dealing with budget cuts and staff reductions, leading them to rely more on their insurer and broker partners, he said.

Mr. Hayes also questioned the panelists about the impact of the massive Gulf of Mexico oil spill caused by the April explosion of the Deepwater Horizon offshore oil rig, calling it the “largest environmental disaster in the history of modern man.”

Mr. Klein noted that BP P.L.C. self-insures, which would reduce the insured loss from the incident. But he said there will be hardening in the market for offshore drilling coverage.

He said the fact that Deepwater Horizon was a joint venture complicated risk management at the project. “We did not know about the risks they were taking,” he said, adding that the incident is likely to lead to greater emphasis on contingency planning.

Mr. Hayes pointed out that hurricane forecasters are predicting an unusually active season this year and hurricanes could worsen the impact of the oil spill.

There is “no question” that a 20-foot storm surge would make the problems caused by the oil spill “orders of magnitude” greater than they already are, Mr. Klein said.

Mr. Hayes moderated the panel discussion.