Dale Sets Public Hearing on Proposed Miss. Windpool Rate Increase

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Insurance Commissioner George Dale has scheduled for June 5 a public hearing in Jackson, Miss. on a proposed rate increase by the Mississippi Windstorm Underwriting Association, which provides coverage for high-risk homes in coastal Mississippi.

The hearing is scheduled for 9 a.m. at the state Capitol.

In April, the MWUA, also known as the windpool, requested a rate increase of 397.8 percent for private dwellings insured for wind and hail damage, a 268 percent rate increase for commercial property, and 60.4 percent for mobile homes. The requested increase is not for paying claims from past storms, but for additional reinsurance for the upcoming hurricane season.

The wind pool covers about 15,000 homes and businesses in the most storm-prone areas of the six coastal counties.

Dale can deny, approve or reduce the request, but must make a decision within 30 days.

Dale had hired an actuarial firm in Atlanta to analyze the request.

“This is a decision that will affect the entire state. I welcome the opportunity to hear the opinions and suggestions from all sides of the issues.

“I stress that it is important that I act in the best interest of all Mississippi policyholders. I have to consider granting an increase to maintain the windpool’s stability, to assure there is a viable insurance market for citizens statewide,” Dale said Tuesday in a statement.

The windpool had 15,252 policyholders when Katrina hit in August. The insured value of those policies was $1.87 billion. After the storm, claims paid by the pool have totaled $603 million, or about one-third of the total insured value, said Greg Copeland, an attorney with Copeland Cook Taylor & Bush, who serves as counsel to the MWUA.
In 2005, the pool had gross revenue of $13.5 million and paid $8.8 million for $175 million in reinsurance coverage against risks and to help offset losses, such as those that occurred with Katrina, officials said.

The Legislature created the pool in 1987 to write wind and hail policies in the six south Mississippi counties of Hancock, Jackson, Harrison, George, Stone, and Pearl River. Insurance companies writing homeowner, fire and allied policies own and support the pool.
Once Katrina claims paid by the wind pool reached $175 million, insurance companies doing business in the state were assessed the difference. The assessment is based on the percentage of insurance a company writes statewide, not just policies it writes on the coast.
Dale has said the assessment ultimately will affect all policyholders in the state.

The windpool was the sixth insurer to request a rate hike.

GuideOne and Kemper insurance companies, which each carry less than one percent of the state’s market, were approved for roughly 11 percent rate increases for homeowner policies in recent weeks. Other requests pending include 14 percent rate hikes for Mississippi Farm Bureau and Nationwide, and a 50 percent increase for Balboa home policyholders.