Cook Unveils Property Insurance Legislation | Eastern NC Now

News Release:

    Raleigh, N.C.     Senator Bill Cook (R-District 1) filed a comprehensive property insurance reform bill, SB 208, Tuesday, March 10, 2015. The bill ensures transparency and fairness in the North Carolina property insurance rate-making process. Senator Harry Brown (R-District 6) and Senator Fletcher L. Hartsell joined on as a primary sponsor of the bill as well.

    "The bill requires insurers to provide detailed information concerning their cost and revenues. It gives the Commissioners more latitude in setting rate levels," Cook said. "This bill gives insurers a more efficient mechanism for responding to catastrophic losses in the state."

    Representative Chris Millis (R-District 16), Representative Mike Hager (R-District 112) and Representative David Lewis (R-District 53) filed a companion bill in the house on Tuesday, March 10, 2015 as well.

    This legislation would create a public authority to issue tax-exempt bonds in order to finance potential catastrophic losses. The bonds would be issued if, and only if, a catastrophic event threatens to exhaust the resources of the property insurance pool. No bonds would be issued until after a catastrophic event has actually occurred.

    "The legislation does not impose any new costs on North Carolina citizens. Several other southeastern states (Florida, Texas, and Louisiana) with large coastal exposures have the ability to finance deficits in their wind pools with tax-exempt bonds," Cook said. "For example, in the aftermath of Hurricane Katrina, Louisiana's wind pool issued post-event bonds to enhance its claims-paying ability."

    The bill requires that more than one catastrophe model must be used in a Rate Filing. The models have to be specific to North Carolina risk and reflective of the North Carolina Building Code.

    The bill also makes changes to the existing statute allowing consent to rate as it applies to residential property insurance policies. The rate for which consent is sought must be based on sound actuarial principles, meaning that it is based on and justified by the insurer's own projection of its expected future claims. Once the insurer has obtained the policy owner's consent to a higher rate, future renewals of the policy must provide 30-day's notice to the policy holder and obtain their written consent again.

    "This bill has the support of Insurance Commissioner Wayne Goodwin, North Carolina Association of Realtors and the North Carolina Homeowners Alliance," Cook said.

    To see a copy of the legislation click here.
Senator Bill Cook (R-District 1) is shown speaking at a press conference on Senate Bill 208 (Property Insurance Fairness), Tuesday, March 10, 2015, in Raleigh, N.C. Shown (left to right) are: Insurance Commissioner Wayne Goodwin, Senator Harry Brown (R-District 6), Representative Chris Millis (R-District 16), Cook, Representative Mike Hager (R-District 112), and Senator Norman W. Sanderson (R-District 2).

Contact: Jordan Hennessy
     jordan.hennessy@ncleg.net, •  (252) 619-3606


     300 N. Salisbury Street
     Room 525 • Raleigh, NC 27603

    Phone: (919) 715-8293  •  Fax: (919) 754-3296  •  bill.cook@ncleg.net