Alabama legislators unveiled a law designed to help the Gulf Coast real estate industry and coastal homeowners hit by high insurance rates but Gov. Bob Riley said there is no current consensus to address it in a special session.
The legislation, drawn up after damage from Hurricanes Ivan and Katrina made insuring coastal property far more expensive or unavailable, would create an authority to provide the insurance through an expanded “beach pool.”
It would allow condominiums to self-insure with captives and would provide tax incentives for hurricane-resistant home improvements.
The Republican governor says he likes that the proposal doesn’t get the state into the insurance business. “We want to keep it in the private market,” Riley said.
State Sen. Ben Brooks, R-Mobile, and state Rep. Spencer Collier, R-Bayou La Batre, have drawn up the insurance bills and tried to get a bipartisan consensus on them. Brooks said House Speaker Seth Hammett, D-Andalusia, had discussed the bill with him in Brooks’ Mobile office.
But Democratic leaders still welcomed Riley’s decision not to call a special session on the issue. Hammett said he favors dealing with the insurance problem, ethics legislation and other issues in the Feb. 5 regular session, not in a special session.
No consensus
Senate President Pro Tem Hinton Mitchem, D-Union Grove, said Brooks’ bill has merit, but he agrees with the governor’s decision not to have a special session because there is no consensus on Brooks’ bill.
“We haven’t got everyone together on it, and it would be a waste of legislators’ time and taxpayers’ money to go to Montgomery now,” Mitchem told The Associated Press in a telephone interview.
Mitchem owns two condominiums and is part owner of the Adventure Island family entertainment center in Orange Beach. Last year, he encouraged Riley to call a special session within the regular session to address coastal insurance issues, but that didn’t happen.
In the meantime, condo sales have slowed, insurance prices have risen, and people have tossed around lots of ideas about what needs to be done. The best approach now, Mitchem said, is to use Brooks’ bill to try to develop a consensus by the time the Legislature begins its regular session.
Brooks said his proposal is modeled on South Carolina’s recently passed legislation. It would create the Alabama Coastal Insurance Authority made up of all insurers authorized to write property insurance in Alabama. It would allow people in counties adjacent to the Gulf of Mexico to apply to the authority for essential property insurance coverage.
Designed to make property insurance available to those meeting eligibility requirements, the measure would restructure the so-called “beach pool” coverage, created in 1971, to all of Mobile and Baldwin counties. Among other provisions, the legislation, called the Alabama Coastal Property Insurance Reform Act, would provide an income tax credit for homeowners for hurricane-resistant home improvements of up to $1,000 or 25 percent of the cost, whichever is less.
The governor would appoint nine members to the authority’s board — three of them not affiliated with the insurance industry.
Riley said insurance reform will not be easy “but it’s not a process Alabama can avoid.
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