Coastal insurance bill killed in senate

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Real Estate Agent with RE/MAX of Orange Beach

Coastal insurance bill killed in senate

Midfield senator blocks coastal insurance proposal Friday, May 02, 2008 By BRIAN LYMANCapital Bureau

MONTGOMERY The state Senate killed a bill Thursday that supporters said would help address a coastal insurance crisis in Alabama by expanding the beach pool, but did revive and pass a ban on commercial gill nets.

The Senate's actions leave both issues in the hands of the House of Representatives.

The insurance bill that died Thursday was one of two Senate bills dealing with the topic sponsored by Sen. Ben Brooks, R-Mobile. The Senate on Wednesday approved the other bill, which would allow so-called captive insurers to sell homeowners policies.

Brooks said that expanding the number of people eligible for the Alabama Underwriting Insurance Association often called the beach pool, the coastal insurer of last resort would provide relief to homeowners in Mobile and Baldwin counties, which have been battered by recent hurricanes.

The bill, Brooks said, would help the beach pool survive a catastrophic storm.

"Can you imagine a case where a hurricane hits and there's a catastrophic loss, and the pool goes out of business?" he said.

The bill passed the Senate unanimously, but needed the unanimous approval of senators to transmit it to the House for consideration. The Senate earlier Thursday allowed the transmittal of the captive insurance bill to the House, but state Sen. E.B. McClain, D-Midfield, blocked transmission of the beach pool bill.

McClain said afterward that he "didn't like the bill" but did not elaborate. Brooks accused him of working for "special interests" in the insurance industry, and said he was "profoundly disappointed" for the people of Mobile and Baldwin counties.

"This bill requires a change in the status quo," he said. "Some in the insurance industry are resisting change, (but) others in the insurance industry are supportive."

McClain denied he was working on behalf of a special interest. Brooks' bill did run into opposition from Alfa, the No. 2 insurer in the state.

"We're not going to get into a lot of specifics, but that is a far-ranging bill with a lot of aspects to it," said Dave Rickey, a spokesman for Alfa. "Our opinion was it would not work as well as other options."

Alfa also objected to the Brooks bill allowing captive insurers usually company subsidiaries designed to insure their parent companies' risks to enter the homeowner market.

Rickey said Alfa had "no problem" with a bill sponsored by state Sen. Roger Bedford, D-Russellville, which codifies language defining the beach pool. Unlike Brooks' bill, it does not specifically expand the number of people in Mobile and Baldwin counties who qualify to get insurance through the beach pool. Bedford's bill won approval Thursday and was sent to the House.

Brooks said he will continue to ask Gov. Bob Riley for a special session on insurance later this summer. The governor's office has said that Riley is considering the possibility but has not made any commitments.

The gill net bill, sponsored by state Sen. Pat Lindsey, D-Butler, would ban the use of commercial gill nets in Alabama sea waters.

Senators appeared ready to kill the measure Wednesday night because of objections to the inclusion of mandatory buyouts for gill netters. But after negotiations, the bill was revived on Thursday with mandatory buyouts still in it.

Fishermen who use the nets would be given the option of taking a one-time, 125 percent payout based on their best catch in the years 2004, 2005 or 2006, or five payments each equal to 35 percent of their best catch in one of those years.

The bill is strongly supported by conservation groups, who say the nets are depleting fish stocks off the Alabama coastline and killing other creatures.

State Sen. Trip Pittman, R-Montrose, who supported the bill, said an "attempted compromise" that would have made the buyouts voluntary and attached a five-year study to the bill "didn't work out."

Gill net fishermen and seafood industry representatives were in the State House on Thursday. "The bill is unacceptable to us," said Pete Barber, president of the Alabama Seafood Association. "Last year this was all worked out."

State Rep. Jamie Ison, R-Mobile, is sponsoring a House version that has not yet been voted on in the lower chamber. An attempt to amend the bill in a House committee last month was defeated by committee members. Scientists who wrote to the committee said the link between commercial gill netting and declining fish stocks had already been proven.

State Rep. Spencer Collier, R-Bayou La Batre, whose district includes a number of commercial fishermen, said he expects a floor fight in the House. "This is government putting private business out of business," he said.

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