State insurance chief outlines payment plan

Scott Richardson, state insurance director and a former state senator from Hilton Head Island, was on the island this week for the Out of the Storm '08 insurance conference organized by the Competitive Enterprise Institute, a think tank that advocates

free-market economic policies.

At the conference, Richardson outlined a plan he's been working on for more than a year to help insurance companies better handle cases in which a home is destroyed during a storm.

After Hurricane Katrina, a small percentage of claims ended up in court over disputes about whether wind or flood waters

destroyed a house.

Richardson's plan would seek to have flood, wind and homeowner insurance writers agree on what percentage each would pay if a home is destroyed.

Percentages would depend on wind speed, storm surge and other factors.

Richardson told the conference attendees he is seeking to work with a disaster

modeling company to show a prototype

to insurers within the next 90 to 120 days.

The idea was warmly received.

"It's a practical solution to a complex problem," said Eric Nelson, an executive with Travelers Insurance, who served on a

discussion panel with Richardson.

Jim Faber