Raleigh, N.C. — North Carolina's new insurance commissioner says legislative efforts to freeze increased insurance premiums for coastal homeowners risks making policies less available and less competitive for all residents.

Insurance Commissioner Wayne Goodwin said Monday that lawmakers could upset the balance between competition and the need to beef up the state-sanctioned Beach Plan. The program offers insurance to homeowners in 18 coastal counties at higher-than-market rates when private insurers will not issue policies on a property.

"I want our legislators and the public to know that if we let certain things happen, if we aren't proactive, then all North Carolinians are in jeopardy of having no access to affordable insurance," Goodwin said.

He urged legislators to reject bills that delay or eliminate recent premium increases to the existing Beach Plan. Those increases, Goodwin said, were the product of a complex analysis by former Insurance Commissioner Jim Long.

"We're talking about something that depends on actuarial science, upon statistical and other types of mathematics, the business of insurance and how markets run and capitalism, and then you throw into the mix of what's already complex – meteorological science," Godwin said.

Known officially as the North Carolina Insurance Underwriting Association, the Beach Plan has a pool of money to cover claims. When that is exhausted, all property insurers in the state have to pitch in to make up the difference.

In September, the Insurance Federation of North Carolina estimated that the Beach Plan can cover up to $2.5 billion in losses – far short of the $75 billion in property damage that the federation says could result from a severe hurricane.

Senate Bill 6 and House Bill 26 would hold off increased surcharges of up to 25 percent for homeowners' coverage and up to 15 percent for wind damage that the Beach Plan charges above what regular insurers can offer. The increased surcharges took effect with new policies written since Feb. 1.

Goodwin defended the increases, saying they led insurers to keep premiums down in other parts of the state.

The insurance commissioner cautioned that if insurance companies can't trust North Carolina to uphold the negotiated deal, they could stop writing policies in the state, which State Farm did in Florida.

A State Farm representative said that the company sees North Carolina and Florida as unique markets and, for now, is satisfied with North Carolina's state insurance plans.

"Given the leadership from the Department of Insurance, we're confident that we're going to move forward and come out of this with a resolution that's beneficial to consumers and to insurers alike," said Russ Dubisky, with State Farm.

Goodwin suggested that North Carolina also work with other East Coast states to establish a regional plan for coastal homes.