House approves bill for bonds to help pay catastrophic insurance claims

House approves bill for bonds to help pay catastrophic insurance claims

RALEIGH, NC (WECT) - Representative Chris Millis (R-Pender) is one of the primary sponsors of the Property Insurance Fairness bill, which passed the state House on Wednesday and is headed for the Senate.

The bill is designed to help the state pay for damages, should a major catastrophic event, or several events like hurricanes, hit in a short period of time and substantially impact the state's insurance industry. 

HB 182 allows the creation of the NC Recovery Finance Authority, which would be given the ability to finance public bonds to pay off claims that exceed the amount kept in reserve by the state and insurance companies. That total is now around $3.7 billion, according to Millis. The bonds would not be used until those funds are exhausted.

Millis said issuing bonds would also help replenish the pool of reserve funding in short order, without assessed policy-holders having to shoulder that immediate burden. Repaying the bonds can then be done over a longer period of time, making it easier for customers to afford. 

In introducing this bill to fellow members of the state House, Millis said this model has been used successfully by other states that are exposed to potential events like hurricanes. He added that having the safety net of the bonds would hopefully encourage more insurance companies to write policies in North Carolina, which could lower costs.

To read the text of HB 182 click here:

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