Blanco backs off 'catastrophe fund'

Governor Kathleen Blanco is backed off the idea of creating a "catastrophe fund" that a few months ago was an important piece of her plan to help find more affordable insurance for property owners.

Instead of a catastrophe or "cat" fund, Blanco said she is focusing her legislative initiatives on plans to attract more insurance companies to do business in the state and hoping competition will drive down rates.

Her package includes, among other proposals, paying insurance companies that agree to sell a minimum amount of property insurance in the state.

During the special session of the Legislature in December, Blanco tried but failed to direct money into a catastrophe fund.

In a catastrophe fund, money is put aside to pay some of the damages caused by hurricanes.

Blanco says Allstate Insurance and State Farm Insurance are pushing for a catastrophe fund. Those two companies sell more than half of the homeowners' policies in Louisiana.