Insurance department proposes resiliency grant program to reduce homeowners insurance costs; funding mechanism prompts industry pushback

The New Hampshire Insurance Department asked the House Commerce and Consumer Affairs subcommittee to approve enabling language for a Granite State home resiliency grant program that would provide modest grants to homeowners for risk-reducing improvements — for example, fortified roofing, structural retrofits and hazard mitigation — to reduce underwriting risk and lower the likelihood of nonrenewal or placement in surplus lines markets.

Commissioner DJ Bettencourt told the committee the program was modeled on initiatives in several states and designed to be lean and run without new staff. He said the department originally sought a $1 million allocation from insurance premium tax (IPT) revenues but finance leaders said that money was not available, so the department proposed instead to use up to $1 million of funds that may be unexpended from the department’s assessment-based budget or other sources; if necessary an assessment to make up any shortfall could be considered but the department said that step was not expected to be needed in normal years. Bettencourt characterized the assessment-based approach as stable and noted the department’s budget is roughly in the neighborhood of $15 million.

Bettencourt estimated a rough per-company effect of the $1 million at “approximately between $40,000 to $80,000 per company” on a pro rata basis, but said industry treats the assessment as part of normal budgeting and that unspent assessed dollars are typically credited back to carriers the next year. He also said the program could be run as a smaller pilot with whatever unexpended funds were available.

Representatives of insurers and trade groups raised concerns. George Russo, a lawyer representing domestic insurers and property–casualty groups, said the assessment approach effectively acts like a new tax and could trigger reciprocal tax/fee assessments by other states; he noted insurance companies already pay premium taxes, business taxes, licensing fees and assessments and said the proposed collection would be seen as a new, broad-based charge across many lines of business. Industry counsel also raised legal questions about using assessment proceeds for a program not directly tied to regulatory cost recovery.

Lawmakers discussed alternatives. Several members urged the department to carve a program that would accept federal grants and private contributions and to draft narrow statutory language that would allow the program to be established without a guaranteed $1 million state allocation. Commissioner Bettencourt said the department could present an amendment authorizing the program to accept federal or private funds and run as a pilot with whatever money was available; he offered to draft amendment language for the committee.

No final vote was taken on a funding mechanism during the subcommittee meeting. The department agreed to draft an amendment that would establish the program while allowing federal grants and private contributions to seed it; committee members signaled general support for an enabling, pilot-style approach rather than a guaranteed $1 million annual appropriation.