Insurance department proposes $10 million annual mitigation fund, aims to reallocate non‑admitted policy fee

The Insurance Department asked the Senate Appropriations Subcommittee on Thursday to reallocate part of the state’s non‑admitted policy fee to create a permanent mitigation fund aimed at reducing coastal home insurance premiums.

Deputy Commissioner David Brown told the committee the legislature appropriated $5,000,000 to a “comprehensive hurricane damage mitigation fund” for the current fiscal year and the department is close to beginning mitigation work. Brown said the department is proposing to take $10,000,000 off the top of the non‑admitted policy fee each year to create what he described as a “Strength of Mississippi Homes” mitigation program and to increase individual grant amounts.

Why it matters: Department officials said investing in home mitigation gives immediate, demonstrable reductions in damage from storms and can lower premiums for households that receive grants — a different strategy than routing those funds to the state wind insurance pool and its reinsurance purchases.

Brown told the committee the program already has strong demand: “We’ve had over 1,300 people in the bottom three counties that have signed up for this.” He described the initial grant maximum as $10,000 and said the department is seeking legislation to raise the cap to $15,000 to better match current retrofit costs. “The average cost to retrofit your roof right now is 18 to $20,000,” Brown said, adding that $10,000 “is probably not enough to do it right now.”

Commissioner Cheney, who opened the presentation, and Brown said the department proposes the following reallocation of the non‑admitted policy fee (the department’s figures and characterization): leave $500,000 to the first‑responders fund; retain the annual $3.5 million to the annual fire fund; take $10,000,000 for mitigation; and reduce the wind pool’s annual share to about $8,000,000 (down from roughly $20,000,000 under current distribution). Cheney said the wind pool currently holds a surplus of “a little over $400,000,000.”

Cheney emphasized reinsurance market interest in a funded mitigation program, recounting remarks he said he heard from Senate banking leaders: “He’s the chair of banking in the US Senate saying that the only way that you’re going to reduce rates ... is through mitigation,” Cheney said, characterizing federal and other coastal states’ approaches.

Department staff described possible offsets to avoid the general fund, including raising the company fee tied to agent appointments (the department said the current fee is $25 and proposed raising that to $50 and placing the incremental amount in a special mitigation fund). A staff member clarified at the hearing that companies pay the fee, not individual agents.

No formal vote or appropriation action occurred during the hearing. Department officials asked the subcommittee to consider the reallocation and to support draft legislation; staff said bill language is being prepared and that they would continue discussions with the committee and affected stakeholders.

Next steps: Officials said they plan to begin the first round of mitigation work shortly and asked the legislature to create a recurring funding mechanism in the upcoming session. The request will proceed through the subcommittee and the legislature; no formal action was taken at Thursday’s hearing.