North Carolina House Panel OKs Debt Option to Pay Catastrophic Claims

The state-sanctioned property insurance program in North Carolina coastal counties could borrow to pay for extreme catastrophic losses from hurricanes in legislation making its way through the General Assembly.

The House Finance Committee recommended Thursday legislation creating a public authority that could issue tax-free debt on behalf of what’s known as the Beach Plan. The plan offers insurance in 18 counties where companies are apprehensive about taking on potential liabilities.

Any debt would be issued after close to $4 billion in current reserves, insurance company funds and reinsurance proceeds are exhausted and repaid by assessments on policyholders statewide. The assessment was already created six years ago. The insurance industry says the debt option would help claims be paid more quickly.

The bill could reach the House floor next week.