HB 1127 - Property Insurance Summary

• Establishes an aggregate limit on insurer retention levels at $5.2 billion effective June 1, 2014

• Revises reimbursement contract coverage levels to 45%, 75%, or 90% of losses with 10% (reduced from 5%) for loss adjustment expenses

• Requires State Board of Administration to obtain a line of credit to reimburse insurers when payments exceed available assets and bonding receipts, with sufficient capacity for 3 years' bonding and second-event catastrophes

• Deletes the cash build-up factor requirement from the premium formula and requires peer review by an outside actuary before board approval

• Allows temporary increase in fund claims capacity from $15 billion to $17 billion effective June 1, 2015, if determined necessary to stabilize the property insurance market