Jeff Landry asks state-created insurer to pay for fortified roofs. Here’s why.

Gov. Jeff Landry is asking the state-created Louisiana Workers’ Compensation Corp. to use its balance sheet to help pay for stronger roofs for homeowners in a bid to alleviate a homeowners insurance crisis that has proved an enduring political problem.

Landry, in a letter to LWCC’s leadership dated Monday, noted that the nonprofit company has sizable reserves and is in a strong financial position.

He said unaffordable property insurance is threatening the state’s economy, and asked LWCC to commit “a portion of its excess reserves” to help pay for fortified roofs, particularly for homeowners covered by Citizens, the insurer of last resort.

“LWCC was created to solve a market failure through state enabled action,” he wrote, referring to the Legislature’s creation of the nonprofit in the 1990s to stabilize a tumultuous workers’ compensation sector. “It now possesses the financial capacity, flexibility and institutional credibility to help solve another.”

Landry didn’t specify how much in funding he wants LWCC to dedicate to fortified roofs, or where exactly the money would go. But the Louisiana Department of Insurance spends about $30 million a year on grants to homeowners to help put fortified roofs on their homes, which typically leads to lower home insurance costs.

It’s also not clear whether the LWCC board can legally send money to fortified roofs, or whether it would require a new law.

LWCC Chief Strategy Officer Seth Irby said the company is reviewing the request.

“LWCC is a private, mutual workers’ compensation company owned by our 18,000+ policyholders, which are businesses across the state,” he said in an email. “We take our fiduciary responsibility to our policyholders seriously, as their dollars are used to take care of injured workers. We haven’t spoken to the governor about this request to fund improvements in private residential household roofs.”

The company is a mutual insurer, meaning it returns its profits to policyholders, which are businesses who get workers’ compensation insurance through the firm.

The Times-Picayune reported last week that while the state grant program has helped many in Louisiana adopt stronger roofs, it is not nearly keeping up with demand. State data shows that only about 20% of homeowners who registered in lotteries for the program received a grant.

The LWCC is run by a board of directors that include Louisiana Insurance Commissioner Tim Temple, state lawmakers, and several members appointed by the governor. Boysie Bollinger, a business owner and donor to Landry and other politicians, is also a member.

Financials filed with regulators show the LWCC has been strong enough financially to deliver significant profits to its policyholders in recent years. From 2020 to 2024, the firm sent more than $540 million in dividends to policyholders, documents show.

The company had about $1.6 billion in assets that year, mostly in bonds, and had a $901 million surplus.

The Louisiana Association of Business and Industry, which represents thousands of Louisiana companies and has a seat on the LWCC board, declined to comment.

Landry has largely stayed out of the property insurance debate, signing a package of bills by Temple to loosen regulations on insurer. But as premiums kept rising, he pushed last year for a controversial law to allow Temple to reject rate hikes by insurers, something Temple vowed he wouldn’t use.

In his letter to LWCC, Landry said that while LWCC is not a state agency, “its existence is inseparable from deliberate state action.” He said LWCC has accumulated “extraordinary financial strength” since its inception because of the Legislature’s actions.

“When families cannot insure their homes at a reasonable cost, workers relocate, employers struggle to attract and retain talent, and economic growth slows,” he said. “Housing affordability and insurance availability are now inseparable from workforce stability—and therefore LWCC’s long-term success.”

He asked LWCC to partner with the Department of Insurance and Citizens to help put more fortified roofs on homes.

Fortified roofs — which use better materials and techniques and include a verification system to make sure they’re built right — have emerged as a bipartisan solution to the ongoing insurance crisis.

After a series of hurricanes in 2020 and 2021, a dozen insurers doing business here went belly up. The reinsurance market, responding to the rising threat of extreme weather because of human-caused climate change, as well as inflation, raised costs on insurers significantly.

As a result, tens of thousands of homeowners in south Louisiana have faced staggering property insurance hikes, and huge numbers were forced onto the rolls of Citizens, which charges higher rates by design.

The Legislature last year also set up a tax credit program for people who pay for a fortified roof on their own dime, and established a system where $30 million a year flows to the grant program from revenue generated by the Insurance Department.

Still, some housing advocates and lawmakers have called for more action, including more funding for roofs.

Aside from fortified roofs, Temple has ushered in a series of policies that loosened rules on insurers, making it easier to raise rates and drop policyholders. Rates are still rising but not by the double-digit amounts seen in previous years, in part because the reinsurance industry saw a flood of capital that is driving down costs of protection.

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