(The Center Square) — The Louisiana Senate Finance Committee is reviewing two bills Thursday to address the state’s insurance crisis, one to appropriate funding for an incentive program, and another to restrict use of those funds.
The third day of an extraordinary session to address the state’s insurance crisis moved to the Senate, where the Finance Committee will take up two bills approved by the House on Wednesday.
Representatives approved House Bill 1, sponsored by Rep. Jerome Zeringue, R-Houma, in a 90-8 vote to appropriate $45 million to the Insure Louisiana Incentive Program, which will offer matching grants to insurance companies that write homeowner policies in the state.
Louisiana lawmakers unanimously approved the incentive program last year as nearly a dozen insurance companies with Louisiana policyholders failed in the aftermath of hurricanes Laura, Delta, Zeta and Ida. Many insurers who remained temporarily stopped writing new policies.
Insurance Commissioner Jim Donelon successfully petitioned Gov. John Bel Edwards to call an extraordinary session to minimize the impact of increasing insurance premiums on homeowners. The extraordinary session started Monday and runs through 6 p.m. Friday.
The House on Wednesday also approved House Bill 2, sponsored by Rep. John Stefanski, R-Crowley, in a unanimous vote to prevent insurance companies that have failed in recent years from obtaining grants for new companies.
The failure of numerous Louisiana property insurance companies has driven up the number of polices at Louisiana Citizens, the state’s insurer of last resort, from about 36,000 policies before Hurricane Laura in 2020 to about 125,000 policies now. Louisiana Citizens is mandated by law to be the most expensive option, and the increase in policies has resulted in rate hikes of more than 60%.
The incentive program, first used after Hurricane Katrina, is designed to encourage insurance companies to take over many of the policies, and Donelon told lawmakers he hopes to cut Louisiana Citizens policies by a third over the next year.
Donelon said nine insurers have expressed interest in the program, which he framed as key to keeping thousands in their homes.
“I truly believe that if we do not do this that thousands of homeowners below I-10 and I-12 … are going to lose their homes,” he said.
HB 1 would build on the previous incentive program by imposing a financial strength requirement before grants are awarded, in an effort to ensure all recipients can pay out claims from a natural disaster.
The Senate Finance Committee is scheduled to review the bills at 1:30 p.m. Thursday, before they’re expected to move before the full Senate, which convenes at 3:30 p.m.
The House must vote to concur with any changes in the Senate, and is scheduled to convene on Friday at 2 p.m.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.