Bills on property insurance incentives await JBE action

Louisiana is poised to fund an incentive insurance program structured to recruit insurance companies that will write policies in high-risk areas.

Gov. John Bel Edwards is expected to approve lawmakers’ legislation appropriating $45 million for the initiative. The program, first created in 2005 to address an insurance crisis following hurricanes Katrina and Rita, will provide grants of between $2 million and $10 million to lure underwriters, which will be required to match the funds in addition to the policy offerings.

Insurance Commissioner Jim Donelon successfully petitioned Gov. John Bel Edwards to call the session last week to minimize the impact of increasing insurance premiums on homeowners. Donelon told lawmakers that nine insurers have expressed interest in the program, which he said is critical to keeping many Louisianans in their homes.

“I truly believe that if we do not do this that thousands of homeowners below I-10 and I-12 … are going to lose their homes,” he said, with reference to two major interstates.

Lawmakers on Friday approved House Bill 1, sponsored by Rep. Jerome Zeringue, R-Houma, to appropriate $45 million for the Insure Louisiana Incentive Program, which was resurrected but not funded last session to create a grant program for insurance companies. The bill was approved with overwhelming support in both chambers, with only one vote against in the Senate and eight opposed in the House.

Lawmakers also unanimously approved House Bill 2, sponsored by Rep. John Stefanski, R-Crowley, to prevent insurance companies that have failed from obtaining grants for new companies.

The failure of numerous Louisiana property insurance companies has driven up the number of policies at Louisiana Citizens, the state’s insurer of last resort, from about 36,000 policies before Hurricane Laura to about 125,000 policies now. Louisiana Citizens is mandated by law to be the most expensive option, and the increase in policies has resulted in rate hikes of more than 60%.

Several lawmakers noted the Insure Louisiana Incentive Fund provides only a temporary fix for the state’s insurance woes, and vowed to address the issue again when the regular session convenes in April.

“We will see this issue again when we get to the regular session,” Cortez, R-Lafayette, said before adjournment Friday. “And we’ll have approval as you all know in (the joint budget committee) over any grants for … the Insure Louisiana Incentive Fund, if we can get those companies to come to Louisiana.”

The governor, in a prepared statement, said, “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.”