| 12 | 13 | | A BILL TO BE ENTITLED 1 |
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| 13 | 14 | | AN ACT TO STUDY POTENTIAL IMPROVEMENTS TO THE STATE'S RESIDUAL 2 |
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| 14 | 15 | | PROPERTY MARKET MECHANISMS . 3 |
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| 15 | 16 | | The General Assembly of North Carolina enacts: 4 |
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| 16 | 17 | | SECTION 1. It is the intent of this act to study potential improvements to the residual 5 |
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| 17 | 18 | | property market mechanisms established in Articles 45 and 46 of Chapter 58 of the General 6 |
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| 18 | 19 | | Statutes in response to the increased challenges presented by the significant insured losses caused 7 |
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| 19 | 20 | | by natural disasters. 8 |
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| 20 | 21 | | SECTION 2. The North Carolina Insurance Underwriting Association (NCIUA), as 9 |
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| 21 | 22 | | established under G.S. 58-45-10, and the Joint Underwriting Association (Association) 10 |
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| 22 | 23 | | established under G.S. 58-46-5 shall jointly study the feasibility of both of the following: 11 |
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| 23 | 24 | | (1) NCIUA establishing an excess property coverage option for insureds. For 12 |
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| 24 | 25 | | purposes of this subdivision, "excess property coverage" is defined as property 13 |
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| 25 | 26 | | coverage in addition to the insured's primary policy that is designed to cover 14 |
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| 26 | 27 | | costs exceeding those covered by the insured's primary policy. 15 |
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| 27 | 28 | | (2) The issuance of post-event catastrophe bonds as an option to provide for 16 |
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| 28 | 29 | | covered losses caused by a named storm, as defined in G.S. 58-45-5, in excess 17 |
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| 29 | 30 | | of NCIUA's or the Association's capacity to pay claims. For purposes of this 18 |
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| 30 | 31 | | subdivision, "post-event catastrophe bonds" are defined as debt instruments, 19 |
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| 31 | 32 | | issued in response to a named storm or other natural disaster, that transfer 20 |
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| 32 | 33 | | liability or risk from a property insurance carrier to the State or other investors. 21 |
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| 33 | 34 | | SECTION 3. No later than March 1, 2026, NCIUA and the Association shall report 22 |
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| 34 | 35 | | the findings of this study, including any legislative recommendations, to the chairs of the House 23 |
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| 35 | 36 | | of Representatives Insurance Committee and the Senate Commerce and Insurance Committee. 24 |
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| 36 | 37 | | SECTION 4. This act is effective when it becomes law. 25 |
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