Eight insurers approved to receive financial incentives from Louisiana
State lawmakers gave the nod during a meeting at the state capitol
NEW ORLEANS (WVUE) - Amid the ongoing insurance crisis, a critical legislative panel approved a list of insurance companies on Friday (March 17) who applied to get state grants.
At the urging of Insurance Commissioner Jim Donelon, state lawmakers appropriated over $40 million earlier this year to help entice insurers to write new wind and hail policies in the state.
And during a meeting of the Joint Legislative Committee on the Budget, which includes Louisiana House and Senate members, Donelon asked legislators to approve most of the companies who met last week’s deadline for applying for financial incentives.
“The good news is we offered $45 million in incentive grants to companies to companies to come write more business, new business and take pressure off Louisiana Citizens which has swelled to 135,000 policyholders to date,” said Donelon.
Nine companies applied for the grants but Donelon’s office only recommended eight to lawmakers for approval.
Stewart Guerin is the deputy commissioner for financial insolvency in Donelon’s office.
“We are recommending that we award $41.85 million in grants. One company as the commissioner mentioned is not licensed and has not filed an application to be licensed, so we’re recommending no grant money for that company,” said Guerin.
Even though a majority of lawmakers approved $45 million for the Insure Louisiana Incentive Program, not all are sold on it.
During Friday’s House floor discussions with Donelon, Rep. Jack McFarland suggested giving homeowners the money to harden their homes against hurricanes would be better.
“That would do almost 7,000 homes in Louisiana, so my folks, the messages I’ve gotten since the special session to address the insurance crisis has been more about fortifying their homes than using their taxpaying dollars that we’ve obviously taken too much of this year and giving back to them, to assist them in building and retrofitting their homes to meet the Fortified Homes Program,” said McFarland.
Donelon said he has not settled on an amount to fund Louisiana’s Fortify Homes Program. Meanwhile, his staff says it thoroughly checked out the insurers who applied for the state grants related to policy writing.
“We made sure that they were licensed in state for the appropriate lines of business, we looked at their financial strength ratings from either A.M. Best or Demotech to ensure that they had the minimum ratings,” said Guerin.
In the aftermath of Hurricane Ida, insurance premiums have gone up for many property owners. Donelon has said if the insurance landscape does not improve, many people will lose their homes.
In the end, the committee of legislators approved the eight insurers without objection.
Donelon’s office must still enter into cooperative endeavor agreements with the insurance companies before they get state funds.
Also, Donelon says legislation will be filed for the upcoming regular legislative session seeking additional funding for state grants.
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