New North Carolina Insurance Chief Agrees Beach Plan Needs Help

North Carolina’s new insurance chief agrees with insurance industry critics that the state’s backup wind insurance pool, known as the Beach Plan, needs shoring up.

“I have described our Beach Plan or coastal insurance crisis as a ticking time bomb,” Wayne Goodwin says in an interview in this week’s (Dec. 1) Southeast edition of Insurance Journal magazine.

Incoming Insurance Commissioner Goodwin tells Insurance Journal that it is important that state lawmakers are now looking into the problem and have begun the search for solutions.

“I do agree that the Beach Plan is under-funded. I think and expect there to be a set of solutions. There is no one single silver bullet on this but I do expect a set of solutions to come forward from the current legislative study committee that’s meeting on this problem,” he says.

The actuarial firm Milliman Inc. conducted an analysis of the Beach Plan for insurers. According to the Milliman report, the Beach Plan has no more than $1.5 billion available to pay for hurricane losses. However, a large storm could likely cost more than $ 7 billion, leaving a $6.2 billion deficit and affecting the plan’s ability to pay claims. Insurers fear they could be assessed to make up for any shortfall.

On Nov. 4, Democrat Goodwin won election as commissioner with 52 percent of the vote, succeeding 24-year veteran Jim Long. Goodwin was a former four-term member of the North Carolina House of Representatives before Long named him assistant insurance commissioner in early 2005.

Goodwin campaigned on his experience, noting that as assistant commissioner he was already performing many of the duties of the office.

In the wide-ranging interview with Insurance Journal’s Andrew Simpson, Goodwin also discusses his views on state versus federal regulation, his publicly financed campaign and whether he expects cuts in the department’s budget given the economic downturn.

He also reveals that he is wasting no time reaching out to independent agents across the state. He already has plans in the works for a series of regional town meetings focused on the concerns of agents.

“Insurance agents are on the front lines and they hear from their neighbors, their customers, as to what concerns there are, what’s affordable, what’s not, what products are needed, what products are popular or unpopular,” he says in explaining why he is seeking agents’ advice.

The dates and locations for the agent meetings are still being finalized.

The North Carolina Insurance Department currently has a budget of about $75 million and about 400 employees. It regulates 1,400 insurance companies and 145,000 insurance agents.

The insurance commissioner also serves as the state fire marshal and oversees numerous other industries and activities in the state, including bail bondsmen, auto clubs, the state building code and injury prevention programs.

The complete interview with Goodwin may be found in the Dec. 1 Southeast edition of Insurance Journal magazine.

Topics Agencies North Carolina