The North Carolina Insurance Underwriting Association may explore using tax-exempt bonds to pay future claims, according to the Wilmington Star News.
The idea came up at a meeting last week and was proposed by the agency’s manager, Gina Schwitzgebel, as a potential way to raise funds aside from purchasing reinsurance.
The NCIUA operates the Beach Plan, which provides property insurance, including windstorm and hail coverage, for 18 coastal counties.
According to the newspaper, the Beach Plan needs $4 billion to pay potential claims.
The amount is currently raised through a surplus of $600 million usually obtained from premiums, an assessment on private insurance companies and $2.4 billion in reinsurance.
Instead of reinsurance, Schwitzgebel said as much as $4 billion could be raised through the bond market.
State Sen. Thom Goolsby, R-New Hanover, attended the meeting and said the General Assembly should explore a mechanism to issue the bonds.
