Push to aid post-hurricane insurance market in Louisiana clears big hurdle in Legislature

A bill aimed at reviving Louisiana's wobbly property insurance marketplace cleared a crucial hurdle Wednesday when the state House approved it 90-8.

The measure, House Bill 1, next faces action in the Senate Finance Committee on Thursday at 1:30 p.m.

The lopsided House vote boosts chances for final approval because the proposal faced more pushback earlier in the House than the Senate.

The tally took place on the third day of a special session that has to end by Sunday at 6 p.m.

The bill would put $45 million into a state incentive fund to get insurance firms to write property insurance policies after multiple firms failed or fled the state after hurricanes in 2020 and 2021.

Boosting the ranks of insurance companies, backers said, will make the market more competitive and home insurance premiums more affordable.

"This is not the perfect bill but it is the only bill," said Rep. Timothy Kerner, R-Lafitte.

"It is the only hope for south Louisiana and I beg you to support this bill," Kerner added.

Critics contend there are no guarantees the effort will work, and might fail to provide promised relief for thousands of homeowners said to be in danger of losing their homes.

Rep. Edmond Jordan, D-Baton Rouge, said even if the plan rolls out as advertised 75% of Citizens Property Insurance Corp. policyholders will still be stuck paying costly premiums.

"Hope is not a strategy," said Jordan, who voted "no" on the legislation.

Citizens is a state-run, last resort insurance that is required to charge 10% above market rates and is increasing its premiums by 63%.

State Insurance Commissioner Jim Donelon said the bill would allow about 40,000 policyholders to get off the rolls of Citizens, which has about 125,000 customers today, double the norm.

In an unusual move, Donelon was allowed to field questions for more than two hours before the House debate.

The House approved an amendment that would require insurance companies that take the $45 million to use 25% of the grant dollars for those who now have policies through Citizens.

Rep. Phillip Tarver, R-Lake Charles, who sponsored the amendment, said without that mandate it would be like state officials bet the $45 million in a casino in hopes it would spell relief for homeowners.

Rep. Chad Brown, D-Plaquemine, voted for the bill but said he had major reservations.

Brown said that, since Donelon has held office for 16 years, the state should have more options after back-to-back years of destructive hurricanes.

"All we have heard so far is this plan is going to work because it worked last time," Brown said.

The state launched a similar incentive program after hurricanes Katrina and Rita roared ashore in 2005.

"If I can give any of those constituents some relief or hope for relief, I am willing to do that," Brown said on why he opted to support the measure.

The House also passed a second measure, House Bill 2, aimed at ensuring none of the $45 million goes to insurance firms whose leaders have been embroiled in failed operations.

That vote was 99-0.

Senate President Page Cortez, R-Lafayette, said after the House vote he remains hopeful the session can end Friday.

If the Senate makes any changes the bill has to return to the House, which is set to meet again on Friday at 2 p.m.

The gathering is costing taxpayers about $60,000 per day.

Aside from Jordan the "no" votes cast on the $45 million bill were by Reps. Wilford Carter, D-Lake Charles; Brett Geymann, R-Lake Charles; Sherman Mack, R-Albany; Danny McCormick, R-Oil City; Jack McFarland, R-Jonesboro; Nicholas Muscarello, R-Hammond and Thomas Pressly, R-Shreveport.

Six House members missed the vote.