NU Online News Service, July 21, 2:31 p.m. EDT
Louisiana insurers that choose to remove policies from the state's last-resort insurer will now have their pick of policies rather than having to take them in a bundle, according to recent legislation.
The bill (HB 952), which has already been signed into law, was one that led Insurance Commissioner Jim Donelon to declare the recent legislative session a success for the insurance industry.
In the past, legislators had worried about insurers "cherry-picking" the best available policies from the state-run Citizens Property Insurance Corp., said Greg LaCost, assistant vice president of state government relations for the Property Casualty Insurers Association of America. Therefore, policies offered as part of the state depopulation program were done in bundles of at least 500.
This year, allowing insurers to have their pick of policies received support "to encourage the voluntary market to come write in Louisiana," Mr. LaCost said.
Citizens will be able to "open its whole book of business to interested insurance companies for take-out opportunities," said Commissioner Donelon. "This gives more efficiency and flexibility in the program, as well as more opportunities for decreasing the number of policies Citizens holds."
Following the 2005 hurricane season Citizens' policy count ballooned to more than 170,000. After three rounds of offerings to the private insurance market as part of the depopulation program, Citizens now has 127,000 policies–about at the level before the 2005 season.
All homeowners insurers are eligible to apply to Citizens to become a take-out company, according to the bill. At least once a year, by law, Citizens must offer its policies to the take-out companies.
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