Miss. Legislators Revise Wind Pool

Mississippi lawmakers' passage of legislation to reform the state's wind pool yesterday has drawn praise from an insurance trade group.

The state's legislature gave final approval to a measure that, according to the American Insurance Association, will permit the insurance commissioner to authorize a surcharge on property insurance policies, which would be used by the wind pool, to repay insurers for any assessments they paid to make up for future deficits in the pool.

Republican Gov. Haley Barbour is expected to sign the bill, which passed without a dissenting vote, AIA said.

The HB 1500, the Mississippi Economic Growth and Redevelopment Act recoupment provisions that will allow insurers to recover future wind pool losses statewide,

Under the current wind pool structure, which provides property insurance coverage to homes and businesses in six coastal counties, private property insurers are required to make up any deficits incurred if the wind pool does not have sufficient funds.

Mississippi property insurers after Hurricane Katrina were assessed $545 million, based on their market share, to make up a pool deficit caused by heavy losses. AIA said at that point the only way for carriers to be reimbursed for assessments was through a future rate filing.

Under HB 1500, property insurers will now be repaid for wind pool assessments through a surcharge on property insurance policyholders throughout the state.

Insurers can be assessed up to 10 percent of their total property premiums in the state. HB 1500 also gives the wind pool the authority to issue bonds if the amount assessed is not sufficient to pay claims.

Other provisions include a four-year, $20 million-a-year subsidy to the wind pool to reduce policyholder premiums, and a change in the appointment process for the wind pool's board of directors.

Monies allocated to the pool, with legislative approval, can be used by the state insurance department to help with expenses and costs for reinsurance for the pool operation.

Any money that remains in the pool above a $50 million threshold is returned to the states general fund at the end of the fiscal year.

Cecil Pearce, AIA vice president, Southeast Region said the measure is important for the state and for insurers.

"We applaud the state's political leadership, including Gov. Haley Barbour, Insurance Commissioner George Dale, and legislative leaders, who showed a strong commitment to this legislation, and who worked with AIA to craft a solid reform package."