Debate over Louisiana property insurance crisis takes shape. See what ideas are floated.

Divides over Insurance Commissioner Tim Temple's ambitious plan to tilt Louisiana's property insurance market in favor of insurance companies began to emerge Tuesday, as industry executives hailed it as a way to bring insurers to the market and consumer advocates and lawyers raised concerns that policyholders could suffer even more financially.

The House Insurance Committee heard testimony from a wide array of leaders across the insurance spectrum, from agents to lenders to realtors. All agreed that Louisiana's property insurance market is in a crisis.

Realtors said the dream of homeownership is dying and retirees are being thrust back into the workforce because of staggering premium increases. Insurance executives said reinsurance, a big factor in the ultimate price of insurance, is skyrocketing as firms in London and Bermuda look poorly on the state's market. And lenders said homeowners are being foreclosed upon.

Temple, a Republican former insurance executive who took office after no one qualified against him last fall, has proposed a series of changes to regulations and laws that would make life easier on insurers.

Most of the proposals don't address the underlying problem in Louisiana's market, which Temple acknowledged is the fact that Louisiana's population is concentrated in the storm-prone southern part of the state, where hurricanes have caused a spiraling insurance market.

But Temple, backed by some industry executives, is seeking to make several changes to benefit insurers. Those include ending a rule that banned insurers from dropping homeowners who have been customers with them for three years; lifting caps on insurance company profits; allowing insurers to raise rates without prior approval, and to do so more than once a year; and changing existing laws to reduce the amount of litigation policyholders file when they feel their insurer isn't behaving fairly.

Some of the proposals are already in place through regulatory changes. But ending the three year rule, targeting lawsuits and some other parts of the plan need legislative approval this spring.

Ben Albright, president and CEO of the Independent Insurance Agents and Brokers of Louisiana, applauded Temple for "unwinding" some regulations that he said were heavy-handed, saying insurance companies view the Louisiana regulator as existing to "punish them exclusively."

"We have a ton of companies that write in all the states around us…that do not write in Louisiana," Albright said. "We don't need to be revolutionary. We just need to bring ourselves back to average."

But loosening the rules for an insurance industry that has drawn widespread complaints of unfair practices after recent hurricanes has raised concerns that the plan could make things worse for the average homeowner.

"It is the responsibility of the regulatory body to stand up for consumers and make sure insurers aren't taking advantage of them," said Ben Riggs, head of Real Reform Louisiana.

Climate risk, which is especially acute in Louisiana, has prompted reinsurance companies to hike prices for backstopping insurers in disaster-prone areas around the world.

Big insurers have been fleeing Louisiana since Hurricane Katrina. A dozen companies went belly-up in recent years. Many of them had tried to take advantage of the gap in the market by building a quick book of business taking Citizens policies, writing cheap insurance and farming out the work and premium dollars to less-regulated affiliates. But when a series of storms hit in 2020 and 2021, they collapsed.

The resulting exodus of insurers and spiraling rates have driven huge numbers of people to Citizens, the insurer of last resort. Several close observers of the industry said Tuesday that dozens of bigger insurers have stopped writing policies, and that people in New Orleans and Jefferson parishes often have one or two options for insurance, if that.

Clayton Fields, a broker with Keller Williams, told lawmakers he saw a retired couple forced back into the workforce after their insurance premium tripled. Another family trying to sell their home is facing foreclosure because of dizzying premium increases. And he said a recent college grad was priced out of the homebuying market because insurance was more than triple her budget.

Temple said he is proposing an expansion of a state program that gives up to $10,000 to homeowners toward the cost of putting a new fortified roof on their home. Roofs are typically the most expensive loss during a disaster, and companies are offering discounts on home insurance for people who get a certification saying their roof is fortified.

Temple is seeking $15 million from the Legislature this year, and plans to propose a fee on insurers next year to fund the program in the future. About 3,000 people have been awarded fortified roof grants so far, and the $15 million would be enough for another 1,500 homeowners.