The North Carolina Senate Commerce Committee today passed HB 1305, legislation to reform the state's "Beach Plan." The bill now goes before the full Senate for consideration.
"All North Carolina citizens, the insurance industry, and elected officials need a stable, solvent Beach Plan with a balanced approach to sharing financial responsibility for paying claims following a hurricane," said Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies (NAMIC). "With the movement of the bill to the next stop toward Senate passage, we are moving closer to recalibrating the current system that is out of balance."
The bill includes a $1 billion assessment cap for insurance companies rather than the unlimited assessment potential that currently exists. Other provisions include a catastrophic surcharge on policyholders across North Carolina to help cover the costs of a mega-catastrophe or multiple events during the same year as well as returning the Beach Plan to its original role as the "market of last resort" with rates that more accurately match risk and coverage that isn't vastly more attractive than that available in neighboring coastal states.
"This is not a perfect bill, but it does improve a system that is in dire straits," Reynolds said. "We hope that the full Senate will maintain the momentum and pass this bill; if not, everyone will suffer when – not if – the next big storm hits North Carolina."
NAMIC is the trade organization for more than 1,400 companies that underwrite more than 40 percent of the property/casualty insurance premium in the United States. NAMIC members in North Carolina underwrite close to 40 percent of the total property/casualty insurance premiums in the state.
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