A special session of the Louisiana Legislature to encourage property insurers to do more business in the state got under way this week with Louisiana elected officials describing the effort as a first step to stabilize homeowners’ insurance rates.
Gov. John Bel Edwards called the special session to get lawmakers to fund the Insure Louisiana Incentive Program, which the Legislature created last year but did not allocate the needed funding. The incentive program is designed to encourage insurers to write new policies in the state and decrease the portfolio of state-run Louisiana Citizens Property Insurance Corp., the insurer of last resort, according to the state Department of Insurance.
“I’ve spoken to too many of our state's residents and business owners, struggling to make ends meet, who are now seeing skyrocketing insurance costs,” Insurance Commissioner Jim Donelon said in a prepared statement. “Some are facing being priced out of their homes. My No. 1 priority is stopping that from happening and keeping people in their homes.”
Under the incentive program, the department would award grants of $2 million and $10 million to companies that meet qualifications, and each insurer would be required to provide matching funds to take on their new policies in Louisiana.
Supporters of the special session, however, say more legislative actions will be needed beyond the incentive program to stabilize the property insurance market.
“Ultimately, the legislation to be passed will ideally help stabilize the insurance market for all property owners in the interim while creating a pathway for the additional reforms needed in the years to come to put our markets on more permanent sustainable footing,” Stephen Waguespack, president and CEO of the Louisiana Association of Business and Industry, said in a prepared statement.
And though Louisiana Lawsuit Abuse Watch is not involved with the special session, its executive director said that ensuring the legal environment is equitable will also help to preserve the health of the insurance market.
“A stable business climate that allows all businesses to operate at their most productive levels while providing incentives for growth is critical to Louisiana’s future,” Lana Venable told the Louisiana Record in an email. “A fair and balanced civil justice system that protects the rights of both businesses and consumers is equally important.”
House Speaker Clay Schexnayder also said the legislation passed during the special session would be a first step in a long process.to fix an insurance market battered by record-breaking storms in the last couple of hurricane seasons.
“We expect that Commissioner Donelon will make the incentive program work as a temporary fix, but we need to do more to solve the problem,” Schexnayder said in a prepared statement.