Gov. John Bel Edwards calls special session to address property insurance crisis

The gathering is set to last from Jan. 30 until no later than Feb. 5.

Insurance Commissioner Jim Donelon told a key legislative committee Friday that a special session is imperative since eight insurance companies have failed, and others have quit writing policies, after the state experienced devastating hurricanes in 2020 and 2021.

Donelon wants the Legislature to put at least $45 million into a newly-created fund aimed at luring insurance firms to the state, and giving them enough time to get re-insurance themselves ahead of hurricane season, which starts June 1.

Edwards and House and Senate leaders agreed.

"While Commissioner Donelon says we must do this now, this is just a first step in addressing Louisiana's ongoing insurance issues after the devastating hurricane seasons of 2020 and 2021, a crisis worsened by hurricanes and wildfires in other states in 2022," the governor said in a statement that accompanied the call.

Both Senate President Page Cortez, R-Lafayette, and House Speaker Clay Schexnayder, R-Gonzales, said they back the move.

"Commissioner Donelon has stated that time is of the essence with regard to the Legislature's funding of the incentive program and thus the need to go into special session," said Cortez, also in a statement.

"While we understand this will not completely solve the crisis we recognize the urgency," he added.

Schexnayder was earlier reluctant to go along with a special session and questioned how much would be gained rather than waiting until the start of the 2023 regular legislative session, which begins on April 10.

However, Schexnayder and others say there is no question that the state faces a major property insurance crisis.

"While a special session to fund the Louisiana Incentive Fund is not going to solve the issue of availability and affordability of property insurance for our citizens, it is a short-term band-aid that can be a first step toward a more long-term solution," Schexnayder said.

"The House will continue to work for a more permanent fix to this situation so that our businesses and property owners don't have to go through this continuous cycle," he said.

Donelon has been calling for a special session for weeks.

"I am grateful for Governor Edwards' decision to call the special session and to the Legislature for hearing us out on Friday," Donelon said Sunday.

"I look forward to working together to get this progam funded and start providing relief for Louisiana policyholders as soon as possible."

Late last year Edwards and legislative leaders said they thought the issue could wait until the regular session.

What changed, they said, is that to entice insurance companies to re-enter the market in Louisiana, firms need time to get through a cumbersome process of getting re-insurance themselves.

Doing that, officials said, means traveling to London, Zurich and other distant cities.

Having the incentive fund in place would provide the motivation to do just that, officials said.

Donelon made his pitch Friday to the powerful Joint Legislative Committee on the Budget, including a question-and-answer session that went on for more than two hours.

He said fast action by the Legislature would also trim the rolls of the Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort.

Its rolls have swollen to about 125,000 policyholders — roughly double what was expected — as homeowners desperately sought coverage after multiple firms went out of business.

Under the plan, insurance companies would have to put up $1 for each dollar of state aid, and remain in business for five years or return the money to the state.

State leaders hope the extra session can be limited to seven days or less.

It is set to run from noon on Jan. 30 to no later than 6 p.m. on Feb. 5.

Edwards has limited the agenda to one topic.

The special session is expected to cost taxpayers about $60,000 per day.