Alabama Department of Insurance

The Coastal Insurance Working Group (CIWG), creating byGovernor Robert Bentley in June2015, presented its report to the Governor on January 20, 2016.  The CIWG was charged to focus attention onpublic policy, guidelines, and possible multi-state approaches to address thecost of property insurance along Alabama’s Gulf Coast.  Deputy Commissioner & Chief Actuary CharlesAngell represented the Department of Insurance on the Working Group.  Members of the CIWG included:

• State Legislators: Senator Tripp Pittman (R-Daphne), Senator Bill Hightower (R-Mobile) and Representative Joe Faust (R-Fairhope)
• Governor’s Staff: Suzanna Willis, Administrative Assistant & Policy Advisor
• Alabama Center for Insurance Information and Research:  Dr. Lars Powell, Executive Director
• Alabama Department of Insurance:  Charles Angell, Deputy Commissioner & Chief Actuary
• Coastal Officials:  Councilman Jack Burrell, City of Fairhope, and Beth Lyons, Lyons Law Firm
• Homeowners’ Hurricane Insurance Initiative (HHII) Members: Jerry Doughty, Dan Hanson, Earl Janssen, Charles Kettell, Michelle Kurtz, A.C. Leggett, Cathy Odom, Patti Van Iderstine
• Industry Representative: Steve Simkins, State Farm Insurance Company

The CIWG met two days each week from August 31, 2015 toJanuary 15, 2016, and received testimony from numerous stakeholders and expertsin the field.  In its report, the WorkingGroup recommended:

• Allow the current AIUA (AIUA; also called the “Wind Pool”) to be replaced by a federally tax-exempt non-profit so as to accumulate reserves more quickly and to lower rates and rename the organization the Alabama Coastal Insurance Authority (ACIA).  The new ACIA would sell a replacement cost wind-only policy; reduce rates 20 to 50 percent with post-loss funding and reduce operating expense and taxes.  State legislation would be required.
 
• Coastal Band Strategies.
• Create Lower-Cost Coastal Reinsurer for State Wind Pools and/or Insurers.
• Expand ACIA as admitted insurer in other coastal states.
• Combine the current state wind pools of multiple states into one entity.
• Create a national all-catastrophic-perils strategy.
 
• Fund loss mitigation efforts such as the ALDOI’s Strengthen Alabama Homes program which would reduce wind premiums by 20 to 60 percent and strengthen building codes and enforcement.