Nine insurers have applied for more than $60 million as part of Louisiana’s matching-fund program to expand the number of property insurance policies they write in the state, the Louisiana Department of Insurance said last week.
The nine companies – four based in Florida, two in Texas, two in Nebraska and one in Louisiana –- applied for the funding through the Insure Louisiana Incentive Program. That amount is $17 million more than what state lawmakers have allocated to the program, the department reported.
““The application period was more than successful, and approved companies will soon begin offering competitively priced options to Louisiana home and business owners,” Louisiana Insurance Commissioner Jim Donelon said in a prepared statement. “Along with several legislative proposals we will introduce to strengthen the market during (the) regular (legislative) session, these insurers will demonstrate to the wider industry that Louisiana is a viable destination to do business on a go-forward basis.”
The state has seen several property insurers go into liquidation or pull out of the state over the past year. In turn, the nonprofit Louisiana Citizens Property Insurance Corp., the insurer of last resort in the state, has had to take on more homeowners policies.
Jeff Albright, CEO of the Independent Insurance Agents & Brokers of Louisiana, said the state’s elected officials will have to take additional steps to help stabilize the property insurance market in the wake of a series of severe hurricanes and other challenges.
“The Insure Louisiana Incentive Program will give many Louisiana policyholders a less expensive alternative to Louisiana Citizens,” Albright told the Louisiana Record in an email. “If Louisiana wants to create a competitive insurance market and reduce premiums over the long-term, the state must implement legislative, regulatory and tort reforms to attract more insurers to write insurance and compete in our state.”
LDI has indicated that it expects the companies taking part in the grant program to begin writing policies in April. In addition, the department said the Louisiana House of Representatives’ Insurance Committee chairman, Mike Huval (R-Breaux Bridge), has pledged to secure additional funding for the full $60 million in grants.
Insurers that assume policies held by United Property & Casualty Insurance Co., which has been placed in liquidation, will receive credit under the matching-fund program, according to the LDI.
The companies that applied for grants are Allied Trust Insurance Co. ($6.5 million); Applied Underwriters ($10 million); Cajun Underwriters Reciprocal Exchange ($5 million); Constitution Insurance Co. ($10 million); Elevate Reciprocal Exchange ($5 million); Gulf States Insurance Co. ($3.6 million); SafePoint Insurance Co. ($10 million); SafePort Insurance Co. ($2 million); and SureChoice Underwriters Reciprocal Exchange ($10 million).