The House Insurance Committee considers a new (and improved?) Beach plan today. House Bill 1305, Beach Plan Changes makes various changes to the law that controls “the market of last resort that makes property insurance available to people who are unable to buy insurance through the standard or voluntary market.”. There have been concerns and problems with the plan, as explained in a JLF report by Eli Lehrer. This new bill proposes some solutions to the problems facing the Beach Plan.
Speaking to the committee:
Lisa Martin, Home Builders Association expresses concerns with fairness of requirements,
Mayor of Kure Beach speaks of a need to protect the coast,
Rick Zechini with NC Realtors asks for a balance of affordability and availability of insurance and concerns with flood insurance expansions and mitigation credits in the voluntary markets. Also speaks to a need for transparency and openness.
John Maltti with Travelers Insurance says the marketplace is getting tighter, need to move quickly, and looking positive so far. Insurance companies still have to pay more in assessments in NC, should be capped as in other states.
John Bode, Independent Agents lobbyist says need something that prepares for a hurricane that we all know is coming. Need to move this bill along.
Questions from the committee:
Rep John Blust, R-Guilford, asks about 10 percent increase in insurance charges for homeowners across the state. Holliman says it will be cheaper than if all the insurance companies leave the state.
Homeowners in the piedmont (and elsewhere across the state) will be assessed to pay for cleanup on the coast if hit by a catastrophic storm.
The bill does the following:
Renames it “Coastal Property Insurance Pool”
Requires that the surplus be retained to pay losses, purchase re-insurance and operating expenses and not distributed to member companies
Sets max limits by statute – $750,000 for homeowners and limits contents coverage to 40 percent for building value
Increases homeowners coverage by 10 percent for separate wind and hail coverage and 20 percent if part of a homeowners policy
Additional charges can be applied to dwelling and commercial policies, not just homeowners.
The Assoc has to file a schedule of credits for mitigation and construction features and an installment plan for premium payments.
When losses exceed $1 B, they can institute a 10 percent recoupment assessment on property owners statewide, not to exceed an aggregate amount of 10 percent of the annual policy premium.
Reporting requirements of the amount of homeowner’s insurance in the Plan. The NC Rate Bureau will monitor and review territories in the beach and coastal areas.
Public notice in at least two newspapers with statewide distribution of filings for increases in the rates.
All the provisions in the bill will become effective when it becomes law. A lot of the debate indicates an urgency to get something in place before NC’s coast is hit by a major storm.
The committee votes the bill out of the Insurance Committee and it moves along to House Finance.
