Insurers have expressed support for a limited expansion of South Carolina’s wind insurance pool, as long as the state entity remains a market of last resort and does not offer rates that are competitive with private insurers.
The S.C. Senate Banking and Insurance Subcommittee this week.
was considering HB 3820 which includes a limited expansion of the South Carolina Wind and Hail Underwriting Association as well as a requirement that it remain the “market of last resort.” The legislation ratifies the recent order of the Department of Insurance that expanded for two years the territories available for coverage through the windpool.
At the same time, insurers opposed HB 412, which would expand the wind pool to the entire state.
Insurers said there are things the state could do in addition to expanding the wind pool and the bill contains some of them.
“We urge South Carolina to act cautiously and carefully examine all the available options to opening markets which will encourage and attract capital,” Donald Griffin, vice president, personal lines for the Property Casualty Insurers Association of America, told lawmakers.
“Some of the most promising steps the state should explore are included in the legislation being considered such as the expansion of the windstorm program, improvements to building code requirements and retrofitting, and endorsement of other state and federal initiatives that would protect and enhance the insurance environment for citizens.”
The contains several proposals that go beyond the wind pool. According to Griffin, the bill would create a special catastrophe savings account for purposes of allowing homeowners to build up tax-free funds for payment of a windstorm deductible. There are also provisions that grant special tax credits for qualifying expenditures by homeowners to retrofit their homes to better protect against disasters.
“Roughly one dollar spent to better protect a property results in four dollars saved following an event,” Griffin said. “The approach outlined in this bill and several being considered at the federal level would give homeowners themselves additional incentives to make improvements and would save many dollars later in disaster assistance and other government programs.”
The subcommittee is holding a series of public hearings in coastal communities as part of its deliberation of legislation advancing through the General Assembly that addresses catastrophic risk issues.
“We are encouraged by the 25 percent premium tax credit included in HB 3820 for insurers writing the full policy, including wind and hail, in coastal areas,” said Griffin. “We believe that this is symbolic of the type of innovative approaches that are needed to attract capital to South Carolina.”
Source: Property Casualty Insurers Association of America