Loading LiveCycle Banners.
  1. News Articles
  2. Related News Articles
News Article Details

NC Gov Signs Law Providing Additional Protection from Hurricanes

Source: Property Casualty Insurers Association of America

Back | A- | A+
 Email This     Print     Subscribe

Posted on 31 Aug 2009

North Carolina Governor Bev Perdue has signed legislation that will protect homeowners and business owners across the state by reforming the Beach Plan, according to the Property Casualty Insurers Association of America (PCI).

"Governor Perdue has taken an important step today in securing the financial stability of North Carolina following a hurricane or major storm," said David Sampson, president and CEO of PCI. “HB 1305 will reform the Beach Plan, protect consumers across the state and improve the property insurance market.”

HB 1305 was sponsored by Rep. Hugh Holliman and makes numerous statutory changes to the North Carolina Insurance Underwriting Association (called the Beach Plan), the state’s system for insuring high risk coastal properties. In 2008, PCI commissioned an actuarial analysis by Milliman Inc. that indicated the Beach Plan is woefully underfunded, which financially threatens Beach Plan policyholders as well as the entire state. An internal auditor to the Beach Plan also noted that such deficits could threaten the Plan’s ability to pay claims, bankrupt small insurers and force carriers out of the North Carolina marketplace should a major storm hit the coast.

“Lawmakers advanced HB 1305 this year through thoughtful deliberation to prevent a state property insurance crisis,” said Sampson. “The General Assembly responsibly chose to solve the problem before the storm, instead of after a devastating event.”

The legislation affirms the findings of a 2008 study committee on Beach Plan reforms and takes steps to: financially strengthen the Beach Plan; bring more consumer transparency to the Beach Plan's operations; develop a post-storm solvency plan for the state; create incentives for making homes more hurricane resistant; and take initial steps to return the Beach Plan to a market of last resort. The bill also places specific protections in statute for inland policyholders by providing that they cannot be assessed more than 10 percent of premium annually to pay for Beach Plan losses. The Milliman report had estimated that policyholders could have faced up to 200 percent increases without this reform.

HB 1305 is already beginning to deliver its intended benefits of increasing consumer options in North Carolina through establishing greater certainty for the private market. This month, a subsidiary of AAA Carolinas announced that they will begin writing homeowners insurance throughout the state in response to the positive outlook following the passage of HB 1305.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $176 billion in annual premium, 36 percent of the nation’s property/casualty insurance. Member companies write 43.8 percent of the U.S. automobile insurance market, 29.6 percent of the homeowners market, 32.8 percent of the commercial property and liability market, and 38.4 percent of the private workers compensation market.


Post a Comment
If you are a Storefront / Tradingfloor user, click here to login.
Note: As a guest user, please fill out the form below to post a comment.
Post your comments here.
Name :
Email Address :
Captcha :
Comments :
Character left : 2000