Incentive Fund Legislation Advances at Louisiana Insurance Special Session
BATON ROUGE, La. (WVUE) – State lawmakers on Tuesday (Jan. 31) introduced two bills that real estate agents and insurance agents hope will improve Louisiana’s insurance landscape.
After hours of discussion, the House Appropriations Committee sent House Bills 1 and 2 to the entire House of Representatives.
Kim Calloway of Louisiana Realtors testified before the committee on day two of the special legislative session and explained how higher premiums are affecting homebuyers.
“The cost and unavailability of property insurance is destroying the real estate market,” Calloway said. “Your constituents may be able to buy it, but they can’t afford to own it because of that cost.”
Lawmakers said they too are not immune to higher insurance rates and the fallout from insurers failing financially in the wake of Hurricanes Laura and Ida. MP Tim Kerner (R-Lafitte) said his insurance premium had skyrocketed.
“My premium went from $6,000 to $18,000,” Kerner said, “and it’s happening all over southern Louisiana. People can’t pay for it. The only game in town is what you bring to the table today and we have to do something.
Insurance Commissioner Jim Donelon again urged lawmakers to put $45 million into a stimulus fund to attract more insurers to the state.
“I firmly believe that if we don’t do this, thousands of homeowners below I-10, I-12 will lose their homes,” Donelon said. “Give in the keys, can’t afford the reporting.”
Donelon said eight insurers failed financially and some others stopped writing wind and hail policies after the 2020-21 hurricanes. As a result, 125,000 customers were forced to purchase policies from Louisiana Citizens, the state’s insurer of last resort.
HB 1 puts $45 million in the stimulus fund, but also requires that only insurers with a certain financial strength receive the federal grants.
HB 2 prohibits some companies from participating in the program.
The author of that bill – Rep. John Stefanski (R-Crowley) – said: “What I wanted to make sure didn’t happen is previous people who wrote homeowners insurance in the market who filed for bankruptcy or (have been) foreclosed are insolvent , come back to the market.”
Some Louisiana homeowners are still grappling with Hurricane Ida damage and insurance claims that have not yet been paid. Rep. Chris Turner (R-Ruston) asked Donelon about it.
“What penalties do we impose on these companies that are slow to enforce existing claims?” Turner asked.
Donelon replied, “The law already contains many penalties – two separate penalties in the law for slow-moving claims.”
“What are you?” Turner asked.
“I don’t have it in front of me,” Donelon replied.
Donelon Chief of Staff Denise Gardner told the committee that at least 10 insurers have expressed interest in the proposed stimulus program. Among the companies she named were Allied Trust, Centauri Group, CURE (Cajun Underwriters Reciprocal Exchange), Elevate, Safe Point and Sure Choice.
The full house could take on the two bills on Wednesday.
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