.....Advertisement.....
.....Advertisement.....

Insurance bill moves to Senate commerce committee

-A A +A
By Caroline Curran, Reporter

House Bill 1305, the Beach Plan amendment bill, is slated to go before the Senate Commerce Committee at 10 a.m. Wednesday, Aug. 5.

The bill passed in the House 93 votes to 23 votes July 15, and amends the Beach Plan based on a joint select study committee on the potential impact of major hurricanes on North Carolina’s insurance industry.

Rep. Hugh Holliman, D-Davidson, introduced the bill April 9.

The bill renames the Beach Plan the Coastal Property Insurance Pool; requires a surplus retention; decreases coverage limits from $1.5 million to $750,000 for homeowners’ dwelling coverage; applies surcharges to commercial and dwelling policies, not just homeowners’ policies; requires a minimum deductible for wind and hail coverage of 1 percent of the insured value of the property; and requires public notice in at least two newspapers with statewide distribution of filings for increases in residential property insurance rates.

Cameron Moore, governmental affairs director for Business Alliance for a Sound Economy, presented Brunswick County commissioners with an update on the bill’s status at Monday night’s meeting.

Moore said if the bill makes it out of the commerce committee, it could then be re-referred to the Senate Finance Committee. Moore said a bill typically only goes through one committee on the Senate side of the General Assembly.

Moore raised concerns about the decreased coverage limit from $1.5 million to $750,000 for homeowners’ dwelling policies, saying it was “detrimental to our coastal economy.”

One upside to the bill, he said, was the surplus retention requirement for the Beach Plan.

In a previous interview with the Beacon, department of insurance spokesperson Kristin Milam said the department of insurance was in favor of the Beach Plan surplus retention in this bill, which she described as a consensus bill.

“One of the best things that we like about the bill is the surplus retention,” which allows the surplus to grow indefinitely.

With the required surplus retention, the Beach Plan’s coffers can grow indefinitely, which would allow the insurance industry “to pay their own claims without having to dip into the industry’s assessment, triggering recoupments later on,” Milam said.

Currently, claims are paid out through the Beach Plan’s $1 billion pot. If claims exceed the Beach Plan’s $1 billion, they can be paid out from up to $1.4 billion in the pool’s reinsurance.

If a storm’s claim totals are in excess of the combined $2.4 billion, assessments of up to 10 percent can be assessed on the annual policy premium.