Insurance relief bill nears final approval in Louisiana. Here's what's next.

A bill aimed at propping up Louisiana's flailing homeowners insurance market neared final approval Thursday after the Senate Finance Committee backed it.

The House-passed proposal would put $45 million into a state incentive fund to lure more insurance companies to Louisiana after several firms either failed or fled the state following multiple hurricanes in 2020 and 2021.

The legislation cleared the Senate Finance Committee without objection, setting up a vote in the full Senate at 12:30 p.m. Friday.

However, the committee stripped three amendments from the House version, meaning the amended House Bill 1 will have to return to the House for concurrence if it clears the Senate, and controversy could arise over the changes.

The House is set to meet Friday at 2 p.m.

All the action means the special session may end after five days — two days ahead of mandatory adjournment by 6 p.m. Sunday.

The push behind House Bill 1 is aimed at trimming the rolls of the Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort for homeowners and businesses and one that has to charge 10% above the marketplace.

The average yearly premium for Citizens customers is $4,400, officials said, but the rates for the roughly 125,000 policies controlled by Citizens are set to rise by 63%, largely because insurance companies had to scramble for reinsurance after multiple hurricanes in 2020 and 2021. Firms acquire reinsurance to protect themselves against massive claims after natural disasters.

State Insurance Commissioner Jim Donelon has said that the bill would allow about 40,000 policyholders to get off Citizens' rolls.

One of the amendments that the Senate committee voted to remove would require insurance companies that get the state grants to use at least 25% of the money for Citizens policyholders.

Senate President Page Cortez, R-Lafayette, an ex-officio member of the committee, said he was concerned that the 25% requirement could be interpreted as illegally legislating through an appropriations bill and could spark a lawsuit.

Cortez said any such legal challenge would undercut the aim of the special session: to quickly offer relief to hard-pressed homeowners grappling with unaffordable premiums.

"We don't want, in any way or shape or form, to involve the courts," he said. "You can't make law in an appropriations bill."

The 25% rule could be added to rules crafted by the state Department of Insurance, officials said, and those rules are subject to legislative oversight. Donelon said he also had concerns on whether the 25% mandate was germane to the legislation.

Officials also said that, as a practical matter, they believe that insurance companies awarded the state grants will write new policies for far more than 25% of Citizens policyholders.

The committee also removed an amendment that would give firms that apply for the money a higher priority if their policies include wind and hail coverage.

The incentive fund where the $45 million would go was enacted during the 2022 regular legislative session. Donelon said he erred earlier this week when he and others said Senate Finance Committee Chair Bodi White, R-Central, declined to put money into the fund last year.

Senate Insurance Committee Chair Kirk Talbot, R-River Ridge, said in response to a question from White that no such request came before the finance panel.