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Miss. weighs changes to wind pool

Mississippi lawmakers are considering revamping the Mississippi Windstorm Underwriting Association to help stabilize the state’s post Hurricane Katrina insurance crisis.

The association, commonly referred to as the wind pool, provides coverage to more than 16,000 property owners, primarily on the Gulf Coast, who cannot get policies from the private sector. The wind pool is funded by assessing all insurance companies that provide property coverage in the state.

The wind pool recently received approval for a 90 percent rate increase for its policyholders to cover the higher cost of reinsurance, which is insurance for insurance companies.

During a recent state Senate committee hearing, wind pool attorney Greg Copeland suggested statute changes that include an underwriting requirement for homeowners to storm-proof their property to get coverage and a fee on companies that do not pay their fair share into the wind pool.

Sen. Billy Hewes III, R-Gulfport, said the wind pool also might require more state assistance to help purchase reinsurance. “I think we’re going to have to anticipate as a legislative body … some sort of subsidy,” Hewes said.

However, Copeland cautioned against pumping too much state money into the wind pool. “If you ever let the wind pool become cheaper than the private sector, you’ve gone into competition with the regular insurance market using tax dollars and that’s not fair,” Copeland said.

Lee Harrell, Mississippi’s deputy commissioner of insurance, told lawmakers that other options for stabilizing the market could include a rating tier, where policyholders with the most risk pay a higher rate and the creation of a federal program similar to the National Flood Insurance Program.

The wind pool was created as the state struggled to recover from the devastation of Hurricane Camille in 1969. It has taken in $188 million since the Legislature tweaked the program in 1987 but has paid out $778 million since then, Copeland said.

Copeland has said $175 million of Katrina payouts were made through reinsurance and $545 million was assessed to the wind pool’s member companies.

Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

St. Johns delivers good news for Fla. homeowners

The Florida insurance marketplace got some good news for a change when St. Johns Insurance Co. said it received approval for $20 million loan from Florida earmarked for new homeowner capacity across the state. The note is the first such transaction resulting from the Senate Bill 1980 passed by the Florida State Legislature and signed into law May 16.

“The program could not have come at a better time for Florida homeowners and insurers,” James McCahill, said St. Johns president and CEO, whose company began writing homeowner business in January 2004 and was immediately hit with the 2004 and 2005 storm seasons.

“We re-capitalized and pressed on,” said McCahill. “Our reinsurers and agency network have been supportive and loyal. Our client renewal rate has been consistently in the 95 percent range.”

McCahill said the insurer expects “to write in excess of 100,000 new policies in the next 12 months, or in excess of 200,000 by December 2007.”

Topics Florida Reinsurance Mississippi Homeowners