Beleaguered Louisiana homeowners insurer Americas Insurance Company was officially placed into receivership last week after incurring unmanageable losses first from Hurricane Laura in 2020, and then from Hurricane Ida last year.
The decision by the state’s Insurance Commissioner, Jim Donelon, represents an important step toward the Louisiana Insurance Guaranty Association (LIGA) taking over claim payments, ensuring that most policyholders with pending hurricane claims will get paid.
The Louisiana Department of Insurance (LDI) has been closely monitoring the solvency of property and casualty insurers operating in Louisiana in the wake of the devastating storms the state has witnessed over the past two years.
It warns that several insurers are in danger of exhausting their reinsurance coverage and running out of money due to the cost of major hurricanes, combined with increasing labour and materials prices caused by the hurricanes as well as the recent spike in inflation.
“My number one priority is protecting Louisiana policyholders, and my decision to place this company into receivership will help do that,” Commissioner Donelon said. “LIGA can pay up to $500,000 per claim, and they’re ready to handle what’s coming.”
Americas has approximately 24,000 policies and 13,000 Ida-related claims, and as of December 31, 2020, the insurer covered 1.31% of the Louisiana homeowners insurance market.
A court-appointed receiver is now in charge of operating the company, which has been licensed in Louisiana since 1991.
Americas is in rehabilitation, a form of receivership aimed at solving problems at the company.
Until recently, Americas was domiciled in Washington, D.C., although essentially all its polices were written — and all its Ida-related claims originated — in Louisiana.
