ORANGE BEACH – “There is no silver bullet that

is going to solve all the problems,” said Ragan Ingram, assistant

commissioner for the Alabama Insurance Department, at a public

forum in Orange Beach April 19 discussing the shaky situation for

residential and commercial premiums.

The forum, attended by state Sen. Bradley

Byrne, Rep. Steve McMillan, former mayor of Foley and president of

Baldwin Mutual Insurance Tim Russell, Russell J. Wimberly of the

South Alabama Regional Planning Commission, and David Parsons along

with Regan Ingram of the state insurance department, was held in

order to magnify the various options on the table for coastal

residents.

Byrne said his proposed Senate Bill 42 would

allow single family homeowners and automobiles to be included in

captive insurance programs, noting that previous legislation only

incorporated commercial entities.

Byrne, however, said he prefers

diversification in the coastal insurance market so residents can be

“smart insurance shoppers."

“We have to have more options with more

flexibility,” he said.  “I want to make this

market attractive,” adding that the captive concept is “an option”

but “not the option."

Russell, who has testified in federal hearings

regarding coastal insurance, said that “coastal exposure has

outgrown our capacity,” elucidating that the situation has become

amplified after double-strikes from Hurricanes Ivan and

Katrina.

“The only way to handle coastal American…(is)

by alternative means working within the insurance industry,” he

said, noting that the best way is the captive concept.

Russell says the captive he is pushing for

will be initially funded by Baldwin and Mobile counties and its

respective local municipalities with a startup capital of $20

million - $12 million from Baldwin governments and $8 million from

Mobile.

The figures were based on commercial asset

values, he said.

Orange Beach represents $1.23 billion in

commercial property value while the City of Mobile has $1.04

billion.  Gulf Shores commercial property has

a market value of $830 million.

Russell says he is working out the logistics

for local governments to derive start-up funds from tax-free

bonds.  Revenue, he said, from the for-profit

captive will eventually payoff the bonds.

Afterwards, once policies are accumulated, the

captive will sustain itself.

Taking issue with the potential for a

hurricane during the captive’s onset, Russell said:

""> “Our captive will be there when the going gets tough”

whether this entails “high wind” or “low wind.”

Ingram said that the captive insurance bill is

“a strategy, but not the ultimate strategy to stabilize the

marketplace."

He agreed with Gov. Riley’s assertion that a

healthy market should be part of the solution, and Ingram said the

market has been “softening” of late with “companies tiptoeing back

into the marketplace."

He said the insurance department is currently

looking at a policy in South Carolina which offers tax-credits for

homeowners who improve their residences’ wind

resistance.  Also, he mentioned a statewide

mandate to strengthen building codes.

When asked by a citizen if the state

legislature could impose regulations on insurance companies, Byrne

said that amending the “insurance code is not as easy as it

sounds.”

“I’m like that guy in Tiananmen Square and

it’s all the insurance lobbyists against me,” he

said.

Byrne added that regulating insurance

companies, who for example cherry-pick from north and south Alabama

policies would, in effect, cause insurers to leave the state.

Byrne said the insurance market needs to be as

attractive as possible in order to keep private companies in the

state or if regulated, he said: “I believe they would say

goodbye."

“I am worried about them picking up and

leaving for everybody in the state,” he said.

"">  “While some are not writing for you (the coast), they

are writing (policies) for Silverhill, Loxley and Bay Minette.”