Wednesday, August 02, 2006

Insurance Article - wind pool

Both chambers of the Mississippi Legislature on Thursday approved a bill designed to provide stability for the wind pool -- the insurer of last resort for homeowners in high-risk areas. The bill heads to Governor Haley Barbour.

It is designed to give every wind pool policyholder an estimated $500-a year price break on the premium. The relief would be given for four years, and money to cover it would come from a fund created by the premium taxes paid on insurance policies statewide.

Lawmakers say $20 million a year will be taken from the fund -- that's $80 million over the four years.

Coast leaders say providing stability to the Mississippi Windstorm Underwriting Association, often called the wind pool, is an important step in spurring redevelopment nearly 19 months after Hurricane Katrina left a broad swath of destruction across the southern end of the state.

Any insurance company that writes policies in the state must pay an assessment to the wind pool, which provides coverage in the six southernmost counties. Companies that offer policies in the high-risk areas can write themselves out of the assessment, but many have chosen not to do so.

After Katrina, policyholders statewide saw rate increases as companies tried to cover their costs for the wind pool. Officials say rates on the coast more than doubled in some cases, and the
prohibitively high cost of coverage has put the brakes on redevelopment.

Plan To Shore Up 'Wind Pool' Advances At Capitol
POSTED: 7:03 pm CST January 10, 2007
UPDATED: 7:10 pm CST January 10, 2007
JACKSON, Miss. -- Trying to keep a lid on rising commercial insurance costs along the Gulf Coast, the Mississippi House approved a bill Wednesday to put $30 million into the wind pool program.
The House vote was 119-1. The proposal moves to the Senate for more debate.
Gov. Haley Barbour has said he wants to spend federal money, rather than state money, to shore up the Mississippi Windstorm Underwriting Association.
The association is the insurer of last resort in the six southernmost counties, and it's often called the wind pool. It assesses companies throughout the state to provide coverage in areas most insurers deem too risky.
Since Hurricane Katrina struck Aug. 29, 2005, the wind pool's rates have jumped 268 percent for businesses and 90 percent for homeowners.
Senate Insurance Committee Chairman Dean Kirby said last week that mitigating the commercial rate increases would help drive economic growth on the coast and speed up recovery from the unprecedented storm.

Request For Fed Help With Wind Pool
Gov. Looks For More Federal Money For 'Wind Pool'
POSTED: 12:36 pm CST November 20, 2006
UPDATED: 3:13 pm CST November 20, 2006
JACKSON, Miss. -- Gov. Haley Barbour is looking for a way to pump more federal dollars into Mississippi's "wind pool" insurance program to cope with premium rates that could derail Hurricane Katrina recovery.
Wind-pool premiums were recently increased 268 percent for business owners and 90 percent for homeowners. The increases would have been far worse had the governor not received approval to cushion the blow with $50 million in federal Katrina-relief money.
Even with the rate increases, more Mississippians are being forced into the state-sanctioned wind-pool insurance because private companies are refusing to write policies after Katrina.
The wind pool was created after Hurricane Camille in 1969 to provide wind-damage coverage in areas in the six southernmost counties where companies don't want to write standard policies.
Home and business owners pay the premiums. When damage exceeds the money collected in wind-pool premiums, the more than 500 insurance companies that do business in the state have to pay the difference.
Those companies have had to pay more than $545 million in wind-pool losses from Katrina.
Even with this year's rate increases, the wind pool is nowhere near sound.
The wind pool since 1987 has taken in $188 million in premiums and paid out $778 million.
Dale Approves 90 Percent Increase In Wind Pool Rates

Mississippi Insurance Commissioner George Dale on Friday approved a 90 percent rate increase for homeowner policies provided by the Mississippi Windstorm Underwriting Association. The association, commonly known as the wind pool, had requested a rate increase of almost 400 percent as a result of the devastation caused in August 2005 by Hurricane Katrina. Dale said a rate increase of that size was unacceptable.

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