For Immediate Release: January 21, 2011
Department of Insurance Orders Return of $16 Million to Beach Plan
Order is the result of an examination initiated by Insurance Commissioner Wayne Goodwin
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced a settlement that orders the North Carolina Insurance Underwriting Association, also known as the Beach Plan, to reverse the distribution of more than $16 million it made to its member insurance companies in 2009.
A limited-scope examination ordered by Commissioner Goodwin and conducted by the Financial Evaluation Division of the North Carolina Department of Insurance found that the Beach Plan processed a net distribution to member companies in the amount of $16,460,085 in December 2009.
The examiners contend that the net distribution was not in compliance with North Carolina General Statute 58-45-25(b1) and (b2). These statutory provisions became effective Aug. 26, 2009, and provide in part that the accumulated surplus of the Beach Plan shall be retained from year to year and used to pay losses, reinsurance costs and other operating expenses as necessary.
Under the order, the Beach Plan is to take all necessary steps to reverse the net distribution. The Beach Plan did not admit any violation of North Carolina law.
"I am pleased that we came to an agreement that this money will be returned to the Beach Plan where it can help protect coastal property owners," said Insurance Commissioner Wayne Goodwin.
The N.C. Insurance Underwriting Association is made up of all insurers authorized to write and engage in writing within this state, on a direct basis, essential property insurance, with some exemptions listed under NCGS 58-45-15. The Beach Plan is managed by a staff and board of directors.