N.C. gov. signs coastal insurance bill 2 weeks after adjournment

Bill Hitchcock

N.C. gov. signs coastal insurance bill 2 weeks after adjournment
The Associated Press
RALEIGH, N.C.

Gov. Beverly Perdue signed 22 bills into law Wednesday, including one that attempts to fix the state’s coastal property insurance program by setting up a plan that would pay for massive claims generated by a future large hurricane or natural disaster.

Perdue signed the changes to the state-created but privately run Beach Plan for 18 coastal counties as she whittled down the more than 100 bills left on her desk by the Legislature when it adjourned two weeks ago. Reforms to the Beach Plan in the bill allow state regulators to place a surcharge on every property insurance policy in the state should hurricane damage claims exceed $2.4 billion. The law also reduces the maximum value for which a home can be insured by the plan from $1.5 million to $750,000.

The signing was praised by the property insurance industry, which had sought the plan because of fears a monster storm and resulting damage could cripple North Carolina’s insurance companies if the Beach Plan is underfunded.

“The bill protects consumers and provides needed long-term stability to the insurance market,” the Property Casualty Insurers Association of America said in a prepared statement. “Lawmakers responsibly chose to solve the property insurance crisis before a devastating event such as a hurricane.”

Under the new law, the state insurance commissioner could tack on an extra charge to every property insurance policy if the plan lacks enough money to pay claims. The maximum surcharge could result in an extra 10 percent on the average annual premium.

The surcharge wouldn’t take effect until all of the state’s property insurers first pay $1 billion in assessments.

Policyholders with Beach Plan coverage also could see a higher deductible and would be covered less for contents inside a home.

The Beach Plan began 40 years ago to cover property on North Carolina’s fragile barrier islands where insurance companies didn’t care for the high risk. But its coverage area has grown and liabilities now exceed $70 billion.

Also Wednesday, Perdue signed bills creating licenses for professional hair braiders, encouraging car washes to conserve water and modernizing rules for precious metals dealers.

Perdue had not acted upon any of the 108 bills given to her at the end of the session by the General Assembly until Wednesday. Perdue spokeswoman Chrissy Pearson said the governor had examined each bill closely before making decisions.

Perdue has until Sept. 10 to sign or veto remaining bills. Bills not considered by then automatically become law.

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Author’s Yougler Profile is at  Bill Hitchcock.

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