NU Online News Service, Jan. 27, 8:59 a.m. EST
The North Carolina Insurance Underwriting Association, better known as the Beach Plan, must get back nearly $16.5 million it doled out to member insurance companies in 2009.
Insurance Commissioner Wayne Goodwin said the state Department of Insurance (DOI) examined the Beach Plan's distributions to member insurers and found that they were not in compliance with state laws implemented in August 2009, which state the accumulated surplus of the Beach Plan must be retained from year-to-year for costs related to paying losses, buying insurance, and operating expenses.
The Beach Plan is the state's insurer of last resort. The Plan used to divide surplus among its member insurers, but the new law aims to shore up the insurer's finances and claims-paying ability after studies revealed it potentially did not have the funds to pay claims after a storm.
The Beach Plan reforms that were signed in August 2009 capped insurer's assessments after a storm at $1 billion, and the state's property insurance policyholders would pay a surcharge of no more than 10 percent for losses to the plan above the cap.
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