Mississippi Cuts Wind Pool Customer Premiums by Average of 11 Percent

The pool is funded through customer premiums. Losses in the pool are paid by assets on hand, reinsurance, and, if necessary, assessments against property policies written by private insurance companies.

Last year, the Mississippi legislature passed into law House Bill 1500, creating “The Mississippi Economic Growth and Redevelopment Act of 2007,” also known as the Wind Pool Bill. A key element of this bill was the creation of the Mississippi Windstorm Underwriting Association Reinsurance Assistance Fund. Through this fund, Mississippi will provide up to $20 million a year for four years to help the Wind Pool pay its reinsurance premiums.

Commissioner Chaney authorized the transfer of $25 million into that fund.

“The revisions to the Wind Pool put in place by the legislature in 2007 are working just as we said they would,” Chaney said. “The fruits of the effort of this program have resulted in an average of 11 percent reduction in Wind Pool premium rates for residential properties.”

Reductions will vary depending on the geographic zone, but will average 11 percent for residential consumers. The new rates are expected to be in effect after June 1. Rate reductions will apply to new policies and policy renewals, but will not apply to policies following a mid-term cancellation.

In making the announcement, Commissioner Chaney emphasized that any reconstruction of at least 50 percent or any new construction must be built to the International Residential Building Codes (IRC) or the International Commercial Building Codes (ICC) in order to qualify for Wind Pool coverage.

The state legislature established the Wind Pool in 1987 to provide wind and hail insurance policies for high-risk properties in the six coastal counties in Mississippi that private insurers will not insure.