Nine insurers seek $62 million in incentive cash to revive Louisiana marketplace
Mar. 14—Nine insurers have applied for a total of
It's unclear how many of the companies will be approved, but the degree of interest exceeds the
Donelon Tuesday that he plans to ask state lawmakers for an additional
Eight of the nine applicants are already doing business in the state, Donelon said, but in order to get grant money, they'll have to expand their book of business.
"The round one application period was more (successful) than I hoped for," Donelon said. He later added: "If all goes well, they should be able to begin writing new policies as soon as next month."
The
Donelon pushed for the revived program amid a marketplace crisis that has seen a dozen companies go belly-up, leaving well over 100,000
"The program is critical to our state because the sooner we can distribute the fund, the sooner policyholders can get out of Citizens," said state Rep.
The incentive program is nearly identical to the one launched after Hurricane Katrina. However, this time, insurers will not be required to take policies from Louisiana Citizens.
Even so, Donelon has said he expects some companies to do so voluntarily.
Insurers who receive grant money are required to match the value of the grant dollar for dollar and write twice the sum of that amount in premium every year. So if a company, for example, received a
The nine companies, which are seeking grants of between
If it is successful, the program will help some consumers find moderately less expensive coverage at a time when rates have jumped significantly.
If the past provides a clue, there's no guarantee all the insurers will meet all of the requirements. A review by The Times-Picayune — The Advocate of the Katrina-era grants found that nearly a quarter of the funds
One of the companies that participated in the first grant program, Southern Fidelity, was declared insolvent in 2022, several years after the grant program ended.
Donelon said the department plans to closely monitor the solvency of each insurer, requiring them to keep more capital and surplus. The state will also limit the amount of premium a single company can write in each parish to avoid heavy concentration in a single area, he said.
But there's no guarantee of significantly lower prices. Home and business owners could see at least a moderate decrease in what they pay because Citizens is required by law to set prices above the private market.
"The incentive program is not designed to be a long-term fix," Huval said. "Although attracting a few companies to write homeowners insurance in our market will greatly benefit us in the long term."
Here are the companies that have applied and the grant amounts each has sought:
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— Applied Underwriters,
— Cajun Underwriters Reciprocal Exchange (CURE),
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— Elevate Reciprocal Exchange,
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—
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— SureChoice Underwriters Reciprocal Exchange (SURE),
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Amid crisis, Insurance Commissioner Jim Donelon says he won't seek a fifth term [The Advocate, Baton Rouge, La.]
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