NU Online News Service, April 7, 2:15 p.m.EST

New Alabama Gov. Robert Bentley has signed an executive order tocreate the Coastal Insurance Commission to study availability andaffordability of homeowners insurance and make recommendations.

"The lack of affordable homeowners insurance for people who liveon Alabama's coast impacts the entire state far beyond the coastalcommunities," Bentley says in a statement. "We must stop the risingcost of coastal insurance for the benefit of all Alabamians."

Bentley has promised a special legislative session to addressthe issue later this year.

The commission will consist of seven yet-to-be-named membersappointed by Bentley.

Attempts to reach the Alabama Department of Insurance forcomment were not immediately successful. 

"We believe the commission should focus on a balanced,free-market approach, with emphasis on long-term solutions thatbenefit individuals and communities," says Liz Reynolds, stateaffairs manager for the Southeast for the National Association ofMutual Insurance Companies. "Risk-based pricing, actuarially soundrates, and loss mitigation should be the core of any proposedsolution. Any reforms to the current regulatory system should havethe objective of attracting capital, not scaring it away."

Just two counties, Mobile and Baldwin, make up Alabama's coastalexposure but damage from storms can occur far inland. About 12percent of Alabama's insured exposure is located on the coast,according to data compiled by the Insurance Information Institute(I.I.I.) for a presentation given to the state's Coastal RecoveryCommission late in 2010.

Exposure in Alabama's Beach Plan, the last-resort insurer forthe state's two coastal counties, has soared but remains muchsmaller than residual markets in other Gulf States. Insurers suchas Farmers, Allstate and Alfa have dropped wind coverage in recentyears.