The next stop for a pair of bills to attract more insurance providers to Louisiana will be the desk of Governor John Bel Edwards. Those bills were the product of a special legislative session that was called by the governor after dire predictions by the state’s insurance commissioner showed the shrinking insurance market in Louisiana had reached a crisis point.
When the special session ended last week, state lawmakers had approved bills to use up to $45 million to entice home insurers. House Bill 1 appropriates the funds. House Bill 2 would allow only solvent companies to receive the money.
On Monday’s edition of the Newell Normand Show, Insurance Commissioner Jim Donelon explained the steps the state will take to physically bring back more insurance providers after so many left the state or became insolvent following consecutive years of active hurricane seasons.
Donelon says it starts with invitations that will be sent out this week, giving companies 30 days to respond and show interest in participating in the program.
“The bill says we can authorize grants between $2 million and $10 million to each company. They will have to match whatever amount they ask for and get approved for. They’ll have to put up additional capital into their company, earmarked and obligated to this program, to match whatever amount of the grant that they have approved and have been approved for. Say $5 million. They put up $5 million. They then have to start writing a new premium,” Donelon told Newell. “In the state of Louisiana, in combination of twice the amount of the grant plus their grant. So, $10 million, they have to write a total of $20 million of new premium and stay on that coverage for a minimum five years.”
Listen to the whole conversation including what policyholders could expect:
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