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June 2007
A myriad of programs in place across the United States provide insurance to high risk policyholders who may have difficulty obtaining coverage from the standard markets. So called residual, shared or involuntary market programs make basic insurance coverage more readily available. This report examines the property insurance coverage provided by Fair Access to Insurance Requirements (FAIR) Plans in hurricane exposed states, Beach and Windstorm Plans, and two state run insurance companies in Florida and Louisiana. In the course of the last four decades these FAIR and Beach Plans have experienced explosive growth both in terms of policy count and exposure value. While a number of factors have contributed to this overall growth, it is clear that in some states such plans have shifted away from their original purpose as predominantly urban property insurers. As a result, many are evolving from their traditional role as markets of last resort into much larger insurance providers. This shift of high risk exposure away from the private insurance market is placing an enormous burden on these plans. In some cases, this has left plans with huge concentrations of risk and, as a result, a number of them are experiencing severe financial difficulties.
Click below to download the I.I.I. White Paper:
 Download/View File: I.I.I. White Paper: Residual Market Property Plans (PDF File) (256 K) | |
