S.C. Regulator Opposes Wind Pool Expansion, Offers Suggestions

March 2, 2007

South Carolina’s new state insurance director rejected calls this week for the broad expansion of a program that offers coverage for hurricane-prone areas and said such a move would cost many consumers more money.

Some legislators have called for an expansion of the state-run program, known as the “wind pool.” The program, the South Carolina Windstorm and Hail Underwriting Association, helps provide coverage in areas where private insurers don’t offer protection. An expansion would make it competitive with private providers, said Scott Richardson, who was appointed by Gov. Mark Sanford this month to head the Insurance Department.

Some insurers are currently dumping policies and raising premiums along the coast, leaving thousands of property owners uninsured in hurricane-prone areas. Others are struggling just to afford protection.

Richardson told a House insurance subcommittee on Wednesday the state agency was ready to expand the “wind pool” a little, but even a slight expansion should be accompanied by tax breaks for insurers and property owners who make homes more hurricane resistant.

Some legislators said it was time for the Republican governor to provide relief now rather than wait for the Legislature to approve the incentive system Sanford wants.

“We need somebody to stand up and not talk about philosophy and Sophocles and all this,” said Rep. Skipper Perry, R-Aiken. “We need somebody to reassure 20-some thousand people that the calvary is on the way and this is what we’re going to do.”

Richardson said the agency surveyed several large insurers and found expanding the “wind pool” program would add $800 to $1,000 to premiums on a $250,000 home. Those premiums now run between $2,000 and $2,500.

“I’m not sure you would want to be on the other end of that phone call when that happens because you’re talking about hundreds, if not thousands, of people” that would see increases, Richardson said.

The former state senator told the panel the agency was talking with insurers no longer providing coverage along the Gulf Coast, where states have clamped down on rates and practices.

“We need to be very careful about what we do legislatively,” Richardson said.

The meeting was a reunion of sorts for Richardson. More than a decade ago, Richardson chaired this insurance subcommittee, though his tenure didn’t end well. He recalled being stripped of the chairmanship because he pushed changes in the state’s automobile insurance system that then-Gov. David Beasley, a fellow Republican, disliked.

Richardson served in the House from 1993 to 1996 and won a Senate seat in 2000. He served there until he resigned last week to take the Cabinet-level job as Sanford’s insurance director.

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