The Mississippi wind insurance pool has received $30 million from the federal Department of Housing and Urban Development.
The funding, in the form of a Federal Community Development Block Grant, is a one time deal, according to Pete Smith, Gov. Haley Barbour’s press secretary.
This announcement, coupled with the $20 million in state funds that came about with the recent signing of legislation affecting the wind pool, will allow the state’s insurer of last resort to slash commercial rates from 268 percent to 142 percent, resulting in millions of dollars in savings to policyholders, according to state officials. The premium reductions for commercial policies could begin as soon as next week.
In 2006, the Mississippi Insurance Department proposed that CDBG grant funds be used to pay for a significant portion of the cost of reinsurance the wind pool was required to purchase.
The reinsurance relief plan has been accepted by HUD, which will provide $50 million over the next two years for that purpose. The $30 million is earmarked for 2007, and an additional $20 million in federal funds is earmarked for 2008.
“This new infusion of money into the wind pool, coupled with the many other steps that are being taken, offers renewed confidence that we will rebuild bigger and better than ever. The ultimate goal is to re-create the private insurance market so that the wind pool isn’t even necessary. I see this as a step toward that goal,” Gov. Barbour said. “The arrival of these funds and the signing of the wind pool bill last week are vital steps forward in continuing to help stabilize the state’s insurance market that was decimated by Hurricane Katrina. Now, even more homeowners and business owners can continue the rebuilding process as wind pool rates are reduced.”
Insurance Commissioner George Dale added, “Wind pool stability and the Legislature’s willingness to work together on these issues will also help make the state a more attractive market to companies considering coming to the state to write homeowner policies and will help entice those companies that have pulled back to once again write homeowner insurance in the state.”
Barbour and Dale announced their appointments to the newly formed Wind Pool Advisory Council. Barbour has appointed Bay St. Louis insurance agent Dave Treutel to a one year term, Moss Point business leader Mark Cumbest to a two year term, and Union Standard Insurance Co. to a one year term. Appointed to three year terms by Dale are Allstate Insurance Co., Nationwide Insurance Co., St. Paul Traveler’s Insurance Co., and Jackson insurance agent Chris Boone.
Other members of the advisory council are State Treasurer Tate Reeves; and these appointees by Lt. Gov. Amy Tuck: Farm Bureau Insurance to a term of two years, coast insurance agent Bobby Portwood for a term of two years, and coast business leader Dave Dennis for a term of three years.
Source: Office of the Governor of Mississippi
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