GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 1200*

Short Title:  Revise Beach Plan Participation Formula.   	(Public)

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Sponsors: Representatives Cocklereece, Dockham; and Rayfield.

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Referred to:  Insurance.

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May 16, 1996

A BILL TO BE ENTITLED
AN ACT TO REVISE THE PARTICIPATION FORMULA OF THE NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION AS RECOMMENDED BY THE LEGISLATIVE RESEARCH COMMISSION'S COMMITTEE ON INSURANCE AND INSURANCE-RELATED ISSUES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-45-25 reads as rewritten:
"§ 58-45-25.  Each member of Association to participate in its expenses, profits, and losses.
All members of the Association shall participate in its expenses, profits, and losses and shall receive credit annually for essential property insurance voluntarily written as determined by the directors of the Association, with the approval of the Commissioner.  Participation of each member in the losses of the Association shall be reduced accordingly. Any insurer authorized to write and engage in writing any insurance, the writing of which requires the insurer to be a member of the Association, pursuant to G.S. 58-45-10, shall become a member of the Association on the January 1 immediately following authorization and the determination of the insurer's participation in the Association shall be made as of the date of membership in the same manner as for all other members of the Association."
Sec. 2.  G.S. 58-45-5(6) is repealed.
Sec. 3.  The directors of the North Carolina Insurance Underwriting Association (Beach Plan), in consultation with the Department of Insurance, shall develop a plan to revise the participation formula of the Plan in a manner that encourages insurance companies to write voluntary policies in the beach area or other areas of the State and to write themselves out of the losses of the Plan, to apply to the 1996-97 fiscal year.  In connection with the development of the plan, the Department and Association shall determine the reasons insurance companies are not writing voluntary coverage on properties in the beach area of the State, considering, among other factors, that the companies may cede wind risks to the Association.  The directors shall report to the Legislative Research Commission's Study Committee on Insurance and Insurance-Related Issues on their findings and the revised formula on or before October 15, 1996.
Sec. 4.  Sections 1 and 2 of this act become effective October 1, 1996, and apply to policies issued or renewed on or after that date.  The remainder of this act is effective upon ratification.