Louisiana Citizens Property Insurance announces 12th depopulation

Louisiana Insurance Commissioner Jim Donelon announced the twelfth successful round of depopulation for the Louisiana Citizens Property Insurance Corporation (Citizens). Citizens offers property insurance to any home or business owner that cannot otherwise obtain it, at rates adjusted annually to keep it non-competitive with the private market.

This depopulation results in lower premiums for policyholders and reduces the potential for future assessments, which are charged to all property insurance consumers across the state when Citizens’ exposure exceeds their reinsurance coverage and cash availability.

This is the first depopulation under the new rules of the Take-Out Program through Act 131.

Program changes under Act 131

Act 131 changed the Take-Out Program mandate to open their book of business each year into an option to offer policies to the voluntary market with governing board approval. It further allows Citizens to base their offerings on geographic and risk characteristics that reduce its exposure while allowing Citizens’ leadership to ensure that the insurer of last resort has sufficient infrastructure to fulfill its obligations following Louisiana’s next severe weather event.

According to Citizens, five companies requested 633 residential policies this year from a pool of approximately 2,000 policies made available for depopulation. All five companies participating in this year’s round of depopulation have previously participated in the program. They are Access Home Insurance Company, Maison Insurance Company, Ocean Harbor Casualty Insurance Company, Safepoint Insurance Company, and Spinnaker Insurance Company.

A letter from Citizens notifies consumers whose policies are selected for depopulation. Policyholders have until February 28, 2019 to opt out of moving to a private company and choose to stay with Citizens.

Related: ‘Loss creep’ from major recent hurricanes threatens premium hike in Florida