Louisiana lawmakers fund $45M insurer incentive program
Funding for the program comes as the state faces one of its toughest home insurance markets in decades.
State lawmakers in Louisiana earmarked $45 million in funds to support the Insure Louisiana Incentive Program, which was established during the 2022 regular legislative session but not funded, according to the state’s department of insurance. A law barring certain companies from being eligible to participate was also passed during the extraordinary session on insurance.
Louisiana Governor John Bel Edwards said in a statement: “This appropriation into the Insure Louisiana Incentive Fund will only partially address the current crisis by bringing more insurers into our market, limiting premium increases by fostering competition, and reducing the number of Citizens policies and the attendant risks of statewide assessments to address the impact of future catastrophic weather events.”
Edwards previously indicated that this would be the first step in addressing the state’s property insurance challenges.
The program, which is similar to a state initiative launched following hurricanes Katrina and Rita in 2005, offers matching grants to insurers to write new policies in Louisiana. The initiative aims to entice private insurers back into the state, while driving down the policy count for Louisiana Citizens Property Insurance Corp.
“This program proved successful after Katrina, creating savings for policyholders every month for nearly two decades until hurricanes Ida and Laura hit,” Louisiana Insurance Commissioner Jim Donelon said in a release. “We’re going to repeat that proven success and propose new, sustainable solutions to ensure people can protect their property and afford to live and prosper in Louisiana for generations to come.”
How the incentives package works
Donelon explained the program will give grants out ranging from $2 million-$10 million to qualified companies, which will be required to provide 100% matching funds for the grants. Additionally, the new premium required to be written by each company is at least two times that total amount.
Louisiana also passed a bill that makes certain the program is unavailable for companies. Organizations that are deemed ineligible meet two criteria:
- Any insurance company with an officer, director, or controlling shareholder who was an officer, director, or controlling shareholder of an insurance company licensed in Louisiana that filed for bankruptcy or was declared insolvent.
- Any insurance company whose parent company controlled all or part of an insurance company licensed in Louisiana that filed for bankruptcy or was declared insolvent.
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