Insurers Urge S.C. Legislature to Pass Coastal Insurance Reforms

The Property Casualty Insurers Association of America commends Gov. Mark Sanford and the South Carolina Legislature for advancing an agenda of reform aimed at strengthening the state’s coastal insurance market.

Today the South Carolina House concurred with the Senate on the omnibus bill and forwarded it to the governor who is expected to sign the legislation.

Legislation, HB 3820, includes a limited expansion of the South Carolina Wind and Hail Underwriting Association as well as a requirement that it be the “market of last resort” and not offer rates competitive with the private market.

This legislation ratifies an order of the Department of Insurance that expanded for two years the territories available for coverage through the windpool.

Additionally the bill contains several proposals that would address catastrophic risks, benefit consumers and help stabilize the insurance marketplace.

“South Carolina is considering a number of promising steps in this legislation that if passed, could provide stability to the state’s insurance market,” said Robert Herlong, vice president and regional manager for PCI. “This positive approach to insurance reform is welcomed and we believe that this effort is the type of innovative thinking that is needed to attract capital to the state. South Carolina appears to be on track with a well-reasoned approach, rather than a quick-fix solution that could ultimately be counterproductive.”

A key part of the long-term solution to natural catastrophe exposure is to expand private sector capacity to handle the risk. PCI strongly supports efforts to make markets more responsive to the risks we face.

“Additionally, long-term solutions must include effective mitigation efforts,” Herlong said . “Roughly one dollar spent to better protect a property results in four dollars saved following an event. The approach outlined in this bill and several being considered at the federal level would give homeowners themselves additional incentives to make improvements and would save many dollars later in disaster assistance and other government programs. These are the efforts that truly help to bring down the cost of insurance.”

The Legislature is in its final days and the bill has passed both the House and Senate in different versions. If the House does not accept the Senate changes a conference committee will be appointed to work out an agreement.

Source: Property Casualty Insurers Association of America