Louisiana closes insurance incentive applications as it awaits more funding
The second round of applications for the Insure Louisiana Incentive Program was originally scheduled to remain open through May 25.
Applications opened May 1 for the second round of the Insure Louisiana Incentive Program, but the Louisiana Department of Insurance (LDI) announced May 16 that the application period was closing early while the program awaits more funding. This round of applications was originally scheduled to remain open through May 25.
The incentive program began after Hurricanes Katrina and Rita in 2005. It was reenacted through the Louisiana Legislature in 2022 in an attempt to increase the availability of property insurance by encouraging insurers to participate in the voluntary property insurance market and take some pressure off the Louisiana Citizens Property Insurance Corporation.
According to the LDI, the program works as such:
“A grantee shall write new property insurance in Louisiana with net written premiums of at least a ratio of $2 of premium for each $1 of the total of newly allocated property insurer capital combined with $1 of the grant from the Incentive Program Fund. For example, a grantee is awarded a $2,000,000 grant. In the first 24 months after receipt of the grant, the grantee must write property insurance in Louisiana with net written premiums of at least $8,000,000. The grantee must write at least $4,000,000, or 50%, of the net written premiums for policyholders whose insured property is located in the federal Gulf Opportunity Zone Act of 2005 in Louisiana.”
Insurers that receive grants must maintain that net written premium ratio for at least five years. The business written can be residential, commercial, mono-line or package property policies, but it must include coverage for wind and hail with limits equal to those for other perils under those policies.
Companies who have been approved to receive grants through the incentive program so far include SureChoice Underwriters Reciprocal Exchange ($10 million), SafePoint Insurance Company ($8.5 million), Allied Trust Insurance Company ($6.5 million) and Elevate Reciprocal Exchange ($3.75 million).
There was a total of $3.15 million in grant fund available during the second application period, but the LDI expects another $10 million will be appropriated for the program during Louisiana’s legislative session, at which point applications will reopen.
More information about requirements for participation in the Insure Louisiana Incentive Program can be found here.