The Governor of North Carolina, Bev Perdue, has signed into law House Bill 1305, legislation that makes statutory changes to the North Carolina Insurance Underwriting Association, commonly known as the Beach Plan.
The legislation is intended to make insurance more affordable for homeowners and businesses in high-risk coastal areas. Specifically, the new law places an absolute cap on insurers’ post-storm assessments at $1 billion, and mandates that commercial and residential property insurance policyholders throughout the state would pay a surcharge of up to 10% of premium per year to cover any amount above $1 billion. The effort to reform the Beach Plan gathered speed in 2008 after an actuarial analysis by Milliman Inc. found that the program was under funded.
“Lawmakers advanced HB 1305 this year through thoughtful deliberation to prevent a state property insurance crisis,” David Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI) said in a statement. “HB 1305 will reform the Beach Plan, protect consumers across the state and improve the property insurance market.”
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