JACKSON - Revamping laws governing the Mississippi Windstorm Underwriting Association is one of the options legislators are considering to help stabilize the state's post-Hurricane Katrina insurance crisis.

The association, commonly called the wind pool, provides coverage to more than 16,000 property owners, primarily on the Gulf Coast, who cannot get policies from the private sector. The wind pool, created by the Legislature, is funded by assessing all insurance companies that provide property coverage in the state.

The wind pool recently received approval for a 90 percent rate increase for its policyholders to cover the higher cost of reinsurance, which is insurance for insurance companies.

During a Senate committee hearing Monday, wind pool attorney Greg Copeland suggested statute changes that include an underwriting requirement for homeowners to stormproof their property to get coverage and a fee on companies that do not pay their fair share into the wind pool.

Sen. Billy Hewes III, R-Gulfport, said the wind pool also may require more state assistance to help purchase reinsurance.

"I think we're going to have to anticipate as a legislative body... some sort of subsidy," Hewes said.

However, Copeland cautioned against pumping too much state money into the wind pool.

"If you ever let the wind pool become cheaper than the private sector, you've gone into competition with the regular insurance market using tax dollars and that's not fair," Copeland said.

The two-day Senate hearing will continue today. A special House committee also is expected to begin meeting about the issue.

Lawmakers have said that finding solutions to the insurance crisis will be a priority in next year's session. Many Mississippians who have coverage are paying higher premiums, and some Gulf Coast residents are having trouble finding an insurer because they live in a disaster-prone region.

Lee Harrell, Mississippi's deputy commissioner of insurance, told lawmakers that other options for stabilizing the market could include a rating tier, where policyholders with the most risk pay a higher rate and the creation of a federal program similar to the National Flood Insurance Program.

The wind pool was created as the state struggled to recover from the devastation of Hurricane Camille in 1969. It has taken in $188 million since the Legislature tweaked the program in 1987 but has paid out $778 million, Copeland said.

Copeland has said $175 million of the Katrina payouts were made through reinsurance and $545 million was assessed to the wind pool's member companies.

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By SHELIA BYRD
THE ASSOCIATED PRESS

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