Insurance Commissioner rejects Beach Plan rollback

February 23, 2009 by pamliconews

Goodwin released a letter addressed to Gov. Beverly Perdue and to every member of the General Assembly in which he called his approval of the increases “bold and decisive action to provide long-term solutions to the coastal insurance problems.”

Pamlico, Currituck, and the mainland stretches of Hyde and Dare Counties comprise an area labeled Territory 48, where insurance companies, under an arrangement known as the Beach Plan, will raise premiums 22 percent. Other coastal counties are similarly grouped into four other territories, also facing dramatic increases.

Beach Plan policies differ from regular insurance coverage. Along the North Carolina coast, private insurers are allowed to underwrite risks without sufficient surpluses or ‘reinsurance’ to cover an actuarial estimate, known as ‘probable maximum loss.’

Should the Big One hit, affected insurers can cover any shortfall through a formula that assesses every insurance company doing business in the state.

Just two weeks ago during a symposium in New Bern, more than 200 opponents called the hikes discriminatory and pointed to numerous hurricanes over the past two decades that wreaked more havoc upon inland areas than along the coast.

In his letter, Goodwin disputed that finding.

“History has shown and statistical prediction models support the fact that the majority of damages caused by hurricanes occur along the coast,” he wrote.

Willo Kelly, a lobbyist for Outer Banks homebuilders and Realtors, represents NC-20, a coalition of the state’s coastal regions recently formed to protest the Beach Plan hikes.
In an e-mail Monday to clients and colleagues, she called herself “outraged” and vowed to push for legislative remedies.

“We are being held hostage by the insurance companies and by the almighty Insurance Commissioner,” she wrote.

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