Louisiana lawmakers working with Insurance Commissioner on program to ease insurance crisis
NEW ORLEANS (WVUE) - Many Louisiana homeowners are nervously watching the Tropics, still trying to navigate the state’s insurance crisis and unable to afford their coverage.
We are learning more details about a plan in the works to bring more options for affordable coverage.
“It’s a win, win, win proposition,” Insurance Commissioner Jim Donelon said during a State Budget Committee meeting Friday.
Donelon is working with State Senator Kirk Talbot and State Representative Mike Huval to resurrect a post-Katrina and Rita incentive program to create a more affordable and competitive marketplace.
“If the wheel worked then, hopefully, the wheel will work again,” Huval said.
Huval was an insurance agent at the time and watched companies stop writing policies after the two major storms, bringing Louisiana Citizens, the State’s insurer of last resort, up to 174,000 policies by 2008.
Less than 10 years later, there were 86,000.
Then Governor Kathleen Blanco and Donelon set aside $100 million of matching money for companies to come write new policies in the state.
That time, not all of the help went to Citizens policyholders.
“I would prefer that it’d be 100-percent has to come out of Citizens to benefit those 110,000 people first, who are paying through the nose and calling me and saying if we get a 63-percent rate increase, we’re going to lose our home,” Donelon said.
Donelon says he has to approve the increase if it is justified.
That’s why he wants to use $20 million in projected revenue his office generates to restart this program.
After Katrina and Rita, the State dolled out $29 million to five companies in 2007.
One of those companies was the now bankrupt Southern Fidelity. Another did not follow through with the number they promised to write over the five-year required duration, so it had to give back some of the money.
The overall excess of around $71 million was given back to the State.
Since the money Donelon wants to use this time around goes to the State General Fund, Huval says they have to figure out the mechanism to make it available.
“Even though everybody’s on board that wants to do it, there are certain things that we have to do to do it correctly, so that’s what we’re working on right now,” Huval said. “It’s not a challenge. It’s just a different procedure that we have to go through to make sure that we can do this out of Session.”
But, Huval says they aren’t waiting.
“If the process will allow us to do it before going into Session, I can assure you that everybody that I’ve spoken with is on board to try to make something good for the people that need it,” Huval said.
One of the concerns brought up at the meeting on Friday was incentivizing the companies that have already left us, instead of making it exclusive to the companies that have stuck it out.
Donelon said the program is still being drafted, so that requirement can certainly be added.
See a spelling or grammar error in our story? Click Here to report it. Please include the headline.
Copyright 2022 WVUE. All rights reserved.