Ten property insurance companies already have expressed interest in taking part in a $45 million incentive program just approved by the Louisiana Legislature and governor, according to the state Department of Insurance.
Last week, state lawmakers passed House Bill 1, authored by Rep. Jerome Zeringue (R-Houma), and Gov. John Bel Edwards signed the measure after a special legislative session. State Insurance Commissioner Jim Donelon championed efforts to fund the incentive program to encourage more insurers to write new policies in the state and in turn create more competition to bring down property insurance rates.
“The incentive program, which has a proven record of lowering rates and stabilizing our market after hurricanes Katrina and Rita, is only one part of our plan to protect our homeowners and our way of life from the ongoing crisis in the international insurance market,” Donelon said in a prepared statement.
Others in the insurance industry agreed that the passage of HB 1 was a critical first step to reestablishing the health of the market after a series of storms pounded the state in recent years. The bill is also designed to reduce the number of policies carried by Louisiana Citizens Property Insurance Corp., the state’s nonprofit insurer of last resort.
“Funding of the Insure Louisiana Incentive Program will allow six to 10 insurance companies to offer up to 40,000 Louisiana Citizens policyholders substantially cheaper homeowners policies and help stabilize prices in the Louisiana homeowners market,” Jeff Albright, chief executive officer of the Independent Insurance Agents & Brokers of Louisiana, told the Louisiana Record in an email.
To qualify for grants funded by the incentive program, insurers must have a “minimum financial strength” rating, with insurers that provide wind and hail coverage getting top preference, according to an analysis of the new law by the state Legislature’s staff.
Edwards also expressed gratitude to lawmakers for their overwhelming support for using state general revenues to fund the incentive program.
“This appropriation into the Insure Louisiana Incentive Fund will only partially address the current crisis by bringing more insurers into our market, limiting premium increases by fostering competition, and reducing the number of Citizens policies and the attendant risks of statewide assessments to address the impact of future catastrophic weather events,” the governor said in a prepared statement.