The cost of insuring disaster-prone areas may determine where people are allowed to live, Insurance Commissioner George Dale said here Tuesday.

The need for insurance and government payouts to repair damages from disasters such as Hurricane Katrina in the past 10 years is raising basic questions about which groups of people should bear the risks of similar events in the future, Dale said.

Dale made his comments as guest speaker at the National Association of Retired Federal Employees’ monthly meeting at the Tree House Cafe.

With 31 years in his current job, Dale is the dean of state insurance commissioners. He’s one of 12 elected state insurance commissioners and his length of service is unusual in a job that has a nationwide average length of service of 18 months, he said.

Dale said $86 billion in federal funds has already been appropriated by Congress for the Gulf Coast states since Hurricane Katrina struck, Aug. 29.

Insurance policies held by many coastal residents covered damage from flooding but not from water driven by wind. How much damage of each type occurred and who should pay has been disputed by many residents.

&#8220I said from Day 1 after Katrina hit that the insurance industry is not big enough to rebuild the coast – the Mississippi Gulf Coast or the Gulf Coast in general – by itself. It’s going to take the insurance industry, the federal government, the state government and free enterprise.”

Katrina, the nation’s worst natural disaster, capped a decade or so that was unusual for such disasters in both number and size, Dale said. That fact has raised questions about the nation’s preparedness for a similar disaster and how high prices should be allowed to rise in relatively high-risk areas.

Dale cited as examples of such relatively high-risk areas a California mountainside where flash-flooding or mudslides occur about every eight years, a forest in Wyoming in which forest fires occur about every nine or 10 years – or even &#8220the point in Pass Christian.”

&#8220Should the insurance company be made to insure those people or should we as taxpayers be compelled through our taxes to offer them flood insurance which is not actuarially sound?” Dale said. &#8220When you take in $2 billion and pay out $10 billion, that’s not actuarially sound.”

Dale said how government chooses to allocate the insurance of such risks between itself and others could determine whether the cost of living in certain places is affordable for some people.

&#8220So how are we going to determine where somebody can live?” Dale said. &#8220I don’t think I’m going to make that decision. But we’re raising some questions that have to be answered in the days ahead.”