A number of Louisiana legislators say they don’t seem to be but ready to fund a householders insurance coverage incentive program backed by Insurance coverage Commissioner Jim Donelon, even when Gov. John Bel Edwards calls them right into a particular session in early February.
“I believe the Home is skeptical of all the pieces,” Home Speaker Professional Tempore Tanner Magee, R-Houma, mentioned in an interview Wednesday. “There may be simply no buy-in on what [Insurance Commissioner Jim Donelon] is proposing as being an answer.”
As lately as final week, Senate President Web page Cortez, R-Lafayette, and the Edwards administration mentioned it was probably that lawmakers would convene in a February particular session to place $45 million into an incentive fund for insurance coverage corporations that Donelon is touting as a repair to the state’s insurance coverage disaster.
However in interviews Wednesday and Thursday, many legislators mentioned they weren’t ready to switch that cash in a February particular session—and even when the Legislature convenes for its common session in April. They don’t seem to be satisfied Donelon’s incentive program would alleviate the state’s insurance coverage issues.
“I would like extra info earlier than I log off on that,” says Home Democratic Caucus chair Sam Jenkins of Shreveport.
The state has seen a number of insurance coverage corporations go below or pull out of Louisiana after being walloped throughout the 2020 and 2021 hurricane seasons. The collapse of the market is dumping extra householders’ insurance policies on the state’s insurer of final resort, Louisiana Residents Property Insurance coverage Corp., and driving up housing prices. In communities alongside Louisiana’s coast, property insurance coverage premiums could now come near or exceed the price of dwelling mortgages, say legislators who signify these areas.
To deal with this disaster, Donelon needs to implement an incentive program much like one put in place after hurricanes Katrina and Rita in 2005. Insurance coverage corporations prepared to jot down insurance policies for higher-risk properties would obtain public grants to assist cowl their prices. The aim is to divert insurance policies from Louisiana Residents, which is required by legislation to cost its protection increased than the non-public market.
Lawmakers initially signed off on this proposal from Donelon throughout their 2022 legislative session, however they didn’t put any cash behind it. Now the insurance coverage commissioner needs $45 million to fund his concept, and extra legislators are elevating questions.
“Do we want assist with insurance coverage? Completely,” Home Speaker Clay Schexnayder, R-French Settlement, says. “However is that this the precise plan?”
Magee and a handful of others aren’t satisfied the preliminary Katrina and Rita incentive fund was profitable, as Donelon has repeatedly claimed, they usually query whether or not that very same technique must be used once more.
Whereas extra insurance coverage corporations started writing insurance policies within the aftermath of Katrina and Rita, it might have been as a result of Louisiana went a number of years and not using a main storm, not essentially due to the incentives provided, they are saying.
A few of the smaller corporations in that Katrina and Rita insurance coverage program additionally went stomach up after Hurricane Ida, in keeping with The Occasions-Picayune.
“I believe Commissioner Donelon thinks that folks down listed here are clamoring for a bunch of s— insurance coverage corporations like we had earlier than and we’re not,” says Magee, who represents communities in Terrebonne Parish affected by Hurricane Ida. “We wish good insurance coverage corporations which might be truly going to be companions right here and pay claims and do all of the issues they had been presupposed to do.”
Magee suggests the cash might need extra instant impact if it was used on to decrease premiums in Louisiana Residents, the place individuals should get insurance coverage protection if they’ll’t discover it on the non-public market. Sen. Bret Allain, R-Franklin, agrees and says he would favor to see the state put $45 million into making Louisiana Residents a greater, long-term choice.
“Half of those corporations defaulted that we introduced in and propped up,” Allain says. “I don’t know why we don’t use the cash to prop up Residents as an alternative. We might have a sustainable product of final resort.”
Donelon can have at the least yet one more likelihood to persuade lawmakers of the necessity for his program and the particular session. He’s scheduled to talk earlier than the Legislature’s Joint Legislative Committee on the Funds at this time. Learn the total story from Louisiana Illuminator.