Legislation paving the way for a voluntary market assistance plan (MAP) for homeowners insurance, which would be succeeded by a mandatory plan if the volunteer route failed, is close to becoming law in Maine.
The proposed MAP would survive for only two years under the legislation that has the support of Gov. John Baldacci.
“I hope we never have to go to mandatory,” said Superintendent of Insurance Al Iuppa at this week’s Maine Insurance Agents Association convention when discussing the bill.
Iuppa already has authority to establish a voluntary MAP but he has never exercised that authority because he felt “it wouldn’t be worthwhile without a mandate or an incentive.”
The threat of the MAP becoming mandatory provides the incentive he wanted for insurers to participate.
The MAP legislation also contains certain non-renewal and cancellation provisions, including guidelines for underwriting on the age of a house and prior losses on a property.
Iuppa said he hopes the MAP is only a temporary fix for a small number of problem risks. He said the market is improving and “properties not looked at six months ago are being looked at now” even in coastal areas.
He credited improving property and casualty results for the relaxation in the marketplace, characterizing some homeowners insurance company profits in 2003 as “obscene” but acceptable in the context of poorer result as over the last six to eight years.
For more on the Maine agents’ convention and the new MAP legislation, see the April 19 East edition of Insurance Journal.
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