NU Online News Service, Aug. 27, 3:14 p.m. EDT
North Carolina Gov. Bev Perdue has signed legislation designed to reform operation of the state's property insurer of last resort with provisions to ensure the plan's continued solvency.
The bill approved by the governor, yesterday, would restrict property insurers from assessing policyholders after a catastrophe loss if that loss was under $1 billion.
A report commissioned by the Property Casualty Insurers Association of America (PCI) and conducted by Milliman Inc. found the Beach Plan had $70 billion in exposure with a growth rate of $1 billion each month.
A large storm could inflict losses of more than $7 billion, which exceeds Beach Plan's available funds of $1.5 billion for claims, the report said.
"This is a tremendous step forward for the North Carolina property insurance market in terms of providing stability and predictability for insurers who write in the state, and for those who may be considering entering the market," said the American Insurance Association in a statement.
The changes take effect immediately, AIA noted.
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