House Judiciary II meets to consider, among others, House Bill 742, Prohibit Beach Plan Surplus Distribution.
Sponsored by Rep. Tim Spear (D-Washington), the bill would require that any surplus in the beach plan insurance fund must go to purchase insurance on insurance (also known as re-insurance) instead of those surplus funds being distributed amoung member companies. Legal counsel from the Commissioner of Insurance spoke and said Wayne Goodwin is against this, as is the insurance industry. Want to find a long term large picture solution, this won’t do it. Surplus is part of the solution but should be considered as the whole in order to address the very serious problems with the beach plan. Lobbyists for NC Insurance Federation looking for refinement of a study commission finding with comprehensive new plan for beach insurance, two lawsuits are in Court of Appeals. Retain the surplus is included in all plans but there is $85 Billion in potential exposure with only $700 to $1.1 billion in the plan surplus – this clips one wire and could set off the timebomb. Independent Insurance Association doesn’t like it for IRS could come in and take some of the money in the surplus as has happened in other states. Everyone (except Rep. Spear, it appears) argues that the only answer is a comprehensive reform bill. This bill is crossover sensitive and if this provision is not included in a comprehensive plan, the issue could not be raised again until 2011. Reportedly, the comprehensive bill, which is not crossover sensitive, is still being drafted and is incomplete at this time.
House Bill 742 fails by a voice vote.
See Eli Lehrer’s report on the Beach Plan for more details on the problem with coastal insurance….http://www.johnlocke.org/policy_reports/display_story.html?id=191
