Mississippi House Bill HB1162

Mississippi 2023 Regular Session

• Introduced: 1/16/23
• Refer: 1/16/23
• Engrossed: 2/9/23
• Refer: 2/13/23
• Enrolled: 2/27/23
• Passed: 3/3/23

Caption

Reciprocal insurance; revise sworn declaration requirements of and board of directors for.

Impact

With these amendments, the legislation intends to bolster regulatory clarity in the insurance sector, particularly for reciprocal insurers. It aims to ensure that the interests of subscribers are properly represented on the board of directors, mandating that at least two-thirds are comprised of subscribers or their representatives. By doing so, the bill promotes transparency and accountability which may enhance the financial stability of these insurance groups and protect the interests of policyholders.

Summary

House Bill 1162 is legislation aimed at revising the requirements related to reciprocal insurance within the state of Mississippi. Specifically, the bill amends key sections of the Mississippi Code of 1972, namely Sections 83-33-5 and 83-33-23. The changes involve a refinement of the sworn declaration requirements for reciprocal insurance, clarifying the information needed for such policies. Additionally, the bill outlines the structure and composition requirements for the board of directors governing reciprocal insurance organizations to ensure effective management and control.

Sentiment

The sentiment surrounding HB 1162 has largely been positive, with supporters emphasizing its potential to create a more streamlined and regulatory-compliant environment for reciprocal insurance. The legislative discussions noted that improving the governance structure could lead to greater confidence among subscribers and potential policyholders. However, there were some concerns expressed regarding the sufficiency of measures taken to ensure that the insurance policies are safeguarded against potential liabilities.

Contention

Notably, while the changes were generally well-received, there was some contention regarding the potential for conflicts of interest, particularly concerning the roles of the attorneys representing the reciprocal insurance groups. Critics raised questions about whether the revised requirements would sufficiently mitigate risks of mismanagement or financial impropriety. Such concerns highlight the ongoing debates about balancing regulatory oversight with the need for industry flexibility.