Insurance Capital Incentive Bill Passes House 109-7

House Bill 5057 relating to the Insurance Capital Build-Up Incentive Program (“Program”) was read for a third time today, April 10, 2008, on the House floor. The House approved the bill 109-7 with one amendment (669265) by Representative Ron Reagan. Three other amendments were withdrawn. The bill has been sent to the Senate.

Representative Reagan’s amendment will not allow insurers from the same group to participate in the Program.

A copy of HB 5057 and Representative Reagan’s amendment are attached for your review.

HB 5057 provides for appropriation of state funds in exchange for surplus notes issued by residential property insurers; revises conditions and requirements for providing funds to insurers; requires commitment by insurers to meet minimum premium-to-surplus writing ratios for residential property insurance and for taking policies out of Citizens Property Insurance Corporation (“Citizens”); authorizes the State Board of Administration (“SBA”) to charge fees for late payments; provides that amendments made by act do not affect terms of surplus notes approved prior to specified date; authorizes the SBA and insurers to renegotiate such terms consistent with such amendments; requires Citizens to transfer funds to General Revenue Fund for appropriation by Legislature for program purposes; requires the SBA to transfer specified funds to Citizens each quarter; prohibits Citizens from using certain statutory changes or authorized transfers of funds as justification or cause to seek any rate or assessment increase.

 

Should you have any questions or comments, please do not hesitate to contact this office.

 

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