Latest news with #HarlanVincent
Yahoo
25-03-2025
- Business
- Yahoo
Roundhouse effort to overhaul NM's home ‘insurer of last resort' fails
Rep. Harlan Vincent (R-Ruidoso Downs) asks questions of a panel at the Legislative Finance interim committee in Mescalero shortly after the South Fork and Salt fires. Vincent's bill to reform the state's residual insurance plan did not get through the Legislature, but he says lawmakers' other efforts will help the market cover New Mexicans who need it. (Photo by Danielle Prokop / Source NM) Senate Bill 81, which aimed to make it easier for New Mexicans in wildfire-prone areas to secure home insurance, never received its final committee hearing in the 60-day session, but the bill's Republican sponsor said reason for optimism remains for those trying to rebuild after wildfires. The bill would have required the board overseeing the Fair Access to Insurance Requirements plan to increase coverage limits to $750,000 for homes and overhauled a board now composed of insurance executives. The state's top 10 home insurers have increased premiums 60%, on average, since 2022, and insurers are also increasingly refusing to renew policies or canceling them. That's what makes reforms to the FAIR plan, often referred to as the state's home 'insurer of last resort,' all the more necessary, sponsors have said. NM Gov fire-insurance proposal 'won't happen this session' Even with the increase of costs to rebuild homes and rising home prices, the plan only covered $250,000 of losses for most of its existence until shortly after the South Fork and Salt Fires in Ruidoso, when the board agreed to increase it to $350,000. The FAIR plan board met again during the legislative session and increased the coverage limits to $750,000, plus up to $1 million for commercial properties, according to Rep. Harlan Vincent (R-Ruidoso Downs). Increasing the coverage cap to $750,000 was expected to increase the number of FAIR plan holders from about 7,000 to about 11,000, state insurance officials have said. 'SB81 had lots of traction, and it was a bipartisan effort,' Vincent told Source New Mexico on Saturday, following a post-session press conference with Republican leaders. 'However, the board [was] able to meet all the demands that the bill was asking for, except for the reforming of the board.' The bill's proposed board reforms included adding a consumer advocate, climate scientist and catastrophic risk expert to the board. It was amended again on the Senate floor to scrap that proposal and instead allow legislative leaders to appoint board members. None of the proposed amendments would have allowed the public to see what happens in FAIR Plan board meetings, even though the Legislature created the FAIR plan in 1969 and sought a major overhaul of the program this session. Vincent told Source New Mexico he believes the meetings should be public, however. 'I'm a very transparent person,' he said. 'So, yes, I do.' Why the state's insurance regulator thinks SB81 will save New Mexicans' homes from wildfire Even without SB81, Vincent said he thinks other legislative acts this session will help homeowners protect their homes from wildfires and also get enough coverage to rebuild if they occur. Several bills aim to address the insurance problem, directly or indirectly, including one that creates a state wildfire suppression fund and others that encourage or incentivize wildfire mitigation through the use of thinning and ignition-resistant construction materials. 'I'm thinking that a lot of our insurance problems are eventually going to start going away, traditional insurance starts to come back, because we were able to get four, three bills across the finish line that had to do with wildfire,' he said. 'So we're going to try to start doing wildfire mitigation so that we can make it not such a risk for insurance companies to come back.'
Yahoo
19-02-2025
- Business
- Yahoo
Expansion of state's property insurance program headed to Senate floor
A house that the Hermits Peak-Calf Canyon Fire burned down. Pictured on Monday, Sept. 12, 2022. (Photo by Megan Gleason / Source NM) A Senate committee Wednesday approved a proposal to revamp a state-operated property insurer, despite some Republican concerns that state government is wading too deep into the private insurance market or could spur insurers to flee the state. The move to protect property insurance across the state comes after one of the most destructive wildfires in New Mexico history occurred last summer in Ruidoso, destroying more than 1,000 structures and claiming two lives. Since then, securing insurance coverage, often required for a bank loan to rebuild, has been extremely difficult in the affected area, Rep. Harlan Vincent (R-Ruidoso Downs) told the Senate Finance Committee. And people outside of the burn scar are affected as well: An actuary for the state's Office of the Superintendent of Insurance testified Wednesday that the 10 biggest insurers in the state have increased premiums on average 50% to 60% since 2022. Since 1969, the state has operated a Fair Access to Insurance Program, known as a FAIR plan, which provides coverage to homeowners, currently capped at $350,000. The program has about 1,600 policyholders, according to a legislative analysis, who only qualify after being denied insurance in the private market. Because of that, officials refer to it as the 'insurer of last resort.' New Mexico agency seeks $50M boost to insurance program as finding private insurance gets harder After the Salt and South Fork Fires in Ruidoso, the FAIR plan ran out of money, prompting the Office of the Superintendent of Insurance to charge private insurers statewide $8 million to cover the cost. Policyholders across the state will be paying a small surcharge on their insurance bills for the next several years to help the private insurers recoup that cost, Kane said. A group of industry leaders comprises the board overseeing the FAIR plan. In more than 50 years, the board has rarely increased coverage limits or premiums, even as the industry has canceled or refused to renew policies at a higher rate and as the replacement costs for homes has increased significantly, particularly after the COVID-19 pandemic. Senate Bill 81 aims to change all that, increasing coverage up to $1 million for homes and $5 million for commercial properties, along with an unspecified increase in premiums. It would also require the FAIR plan board to comprise a wider variety of members, including a climate scientist, a consumer advocate, a catastrophic risk management expert and others. Sponsors also are seeking money from the state's general fund to get the newly rebuilt FAIR plan program up and running and prevent it from running out of money should a catastrophic disaster occur before it becomes solvent. The amount will be nailed down as lawmakers complete the state budget, but the sponsors' initial ask is $50 million. New Mexico agency seeks $50M boost to insurance program as finding private insurance gets harder That amount would include $1 million for administrative costs; $9 million for mitigation grants for homeowners to protect their homes from wildfires; and $40 million to pay out in claims if needed in the early days of the program. Sponsor Sen. Peter Wirth (D-Santa Fe) said that even though his district has not experienced a catastrophic wildfire like co-sponsor Harlan Vincent's, his constituents are feeling the effects of higher premiums and even insurers leaving the market. The bill is necessary to help more people get coverage who need it, he said. A fiscal impact report analyzing the bill estimated that its passage would spur 2,500 more policyholders to sign up, increasing the number of policyholders from about 1,600 to more than 4,100. Even if they don't qualify for the fair plan, Wirth said, people across the state need to take steps to prevent wildfires from burning down their homes. 'One of the lessons here is, regardless of this legislation, every one of us needs to be aware of the risks that are out there,' Wirth said. 'And when you live in an interface with a more-forested area, you need to take the efforts yourself around your house to harden.' Sen. Pat Woods (R-Broadview) said he was skeptical the state would end up facing higher liability than promised and would continue to throw general fund money at the fund when there's a catastrophe. He wondered why private insurers weren't being required to offer coverage to those who are now seeking FAIR plans. 'I'm still concerned that we're trying to get into the insurance business,' he said. Committee members voted 7-4 to pass the legislation to the Senate floor. Gov. Michelle Lujan Grisham has promised her own version of a way to 'provide coverage to any New Mexican who needs it,' a spokesperson previously said. That would mean creating a state-run fire insurance program outside of private markets and the FAIR plan. It has not been introduced yet, and the filing deadline for new legislation is tomorrow. The governor's plan would require initial state funding to establish adequate reserves, but the amount has not been determined yet, spokesperson Michael Coleman said, and the state would assume some 'limited liability' to make the program viable. It would require that property owners mitigate risk around their property to qualify for coverage, he said. Coleman did not immediately respond to a request for comment Wednesday about when the governor's proposal would be introduced.
