Lawmakers introduce legislation to address insurance crisis
Louisiana legislative leaders opened a special session Monday with two proposals that add millions to an incentive program for luring companies to the state. But the money would come with some conditions that might limit how many coverage providers qualify to enter the market.
House Bill 1, sponsored by Rep. Jerome “Zee” Zerinue, R-Houma, would transfer $45 million to the Insure Louisiana Incentive Program. The program, established but left unfunded during the 2022 regular session, would offer grants to incentivize new insurers to write policies in Louisiana. It’s modeled after a similar program established following hurricanes Katrina and Rita.
Following a string of home insurers going broke or leaving the state, thousands of property owners in Louisiana have been forced into Louisiana Citizens Property Insurance Corp., the state’s insurer of last resort which can only provide policies significantly above market rate, leaving many in the state without affordable insurance.
Zeringue’s bill would prohibit money in the new insurance incentive fund from going to firms that don’t meet minimum financial strength ratings, a potential safeguard against a future rash of insolvencies. The bill also requires Insurance Commissioner Jim Donelon to expedite the process as much as possible and requires the Department of Insurance to submit annual and quarterly reports on the program to the legislature. The bill did not explain how Donelon should expedite the process.
Another bill, introduced by Rep. John Stefanski, R-Crowley, would forbid insurance companies with an executive or controlling shareholder who held the same position in a failed insurance company from taking part in the incentive program. The same prohibition would apply to insurers s whose parent companies failed in Louisiana.
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Some conservative lawmakers have criticized the narrow scope of the session, which Gov. John Bel Edwards called at the urging of Donelon. A few have also questioned whether Zeringue and Stefanski’s bills adhere to those strict guidelines.
Edwards explicitly designed the session to only allow lawmakers to transfer money into the insurance incentive fund, but Zeringue and Stefanski’s bills would also put restrictions on how that money can be used.
“Whether that’s allowed in the [session] is a very good question,” Sen. Kirk Talbot, R-River Ridge, said of the provisions in the two bills introduced Monday.
Without those additional limitations on who can access the incentives, Stefanski said he will have a hard time voting for the $45 million allocation.
“I’m not too gung ho about the idea in general, but at a minimum, I think [my restrictions] has to be on there,” he said.
Other changes to the legislation could also be coming.
House Speaker Clay Schexnayder, R-French Settlement, said he expects a push to add a deadline for spending the $45 million. If Donelon hasn’t disbursed the money by a certain date, possibly June 1, then lawmakers would be able to take the money back and spend it on other purposes.
Zeringue said a deadline may also be added through state rules for the incentive program, rather than legislation.
Both bills were referred to the House Appropriations Committee. The session must finish by 6 p.m. Sunday, but Senate President Page Cortez, R-Lafayette, told legislators Monday work might wrap up by Friday. It takes a minimum of five days for a piece of legislation to work its way through both chambers.
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