Louisiana offering incentive program credits to insurers taking on UPC policies
Companies will receive credit for any UPC policies that are taken prior to the approval of incentive program applications.
In the wake of United Property & Casualty Insurance Company (UPC) entering receivership, P&C insurance companies that take on Louisiana-based UPC policies before they are canceled on March 29, 2023, will receive credit toward the state’s recently funded insurer incentive program before applications are approved, according to the Louisiana Department of Insurance (LDI).
The state’s insurance department previously said there would be a short period between when UPC policies cancel and when new companies start writing business in the Bayou State. Countrywide, around 200,000 UPC policies will be canceled.
“This action is aimed at helping UPC policyholders save money by avoiding (Louisiana’s) Citizens and achieving our overall goal of reducing Citizens’ book of business,” Louisiana Insurance Commissioner Jim Donelon said in a release. “Reducing Citizens’ policy count stabilizes rates for its current policyholders and reduces the likelihood that every policyholder in the state will be assessed in the event of a future Katrina or Ida-level catastrophe.”
Unlike other state-backed insurers, Louisiana’s Citizens is mandated by law to price policies at least 10% over the highest qualifying market rate or 10% over the actuarial rate, whichever is higher, according to the state’s insurance department. In October 2022, Citizens had a 63% rate increase on residential property policies approved by the state.
For those policies facing cancellation, the LDI recommends:
- Contact multiple agents, including both captive and independent agents, to obtain as many quotes as possible for a new policy.
- Ask an agent to contact Citizens for a quote if you are unable to find a policy in the private market.
- If you do get a Citizens policy, continue shopping around for a new policy as the LDI expects more insurers to begin writing this spring. If you cancel and rewrite your Citizens policy with a private company, Citizens will refund any unearned premium.
- If you have an open claim with UPC, that claim may or may not eventually be transferred to the Louisiana Insurance Guaranty Association (LIGA) for adjusting and payment. Continue contacting UPC about your claim unless you are notified it has been sent to LIGA.
- File a complaint with the LDI if your claim is being mishandled by UPC.
- Monitor LDI communications over the coming months for updates on the status of the Insure Louisiana Incentive Program.
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