Nine insurance companies have applied to participate in the Insure Louisiana Incentive Program, which forms part of recent legislative efforts to attract insurers back to the market, collectively seeking over $62 million in grant money.
The figures were confirmed yesterday by Louisiana Insurance Commissioner Jim Donelon, who also announced that he will not seek re-election in October.
At $62 million, the grant money requested by the nine insurers is about $17 million more than the $45 million that has been allocated to the program so far.
The Louisiana Department of Insurance (LDI) will review the applications over the coming days and determine each company’s eligibility for participating and funding.
Once funding is approved, the LDI will enter cooperative endeavour agreements with the program participants and quickly issue funding to the approved companies, who are expected to begin writing as soon as April.
Specifically, the grant amounts requested by each individual company are $6.5 million by Allied Trust Insurance Company, $10 million by Applied Underwriters, $5 million by Cajun Underwriters Reciprocal Exchange (CURE) and $10 million by Constitution Insurance Company.
Additionally, Elevate Reciprocal Exchange has applied for $5 million, Gulf States Insurance Company for $3.6 million, SafePoint Insurance Company for $10 million, SafePort Insurance Company for $2 million and SureChoice Underwriters Reciprocal Exchange (SURE) for $10 million.
“The application period was more than successful, and approved companies will soon begin offering competitively priced options to Louisiana home and business owners,” said Commissioner Donelon.
“Along with several legislative proposals we will introduce to strengthen the market during Regular Session, these insurers will demonstrate to the wider industry that Louisiana is a viable destination to do business on a go-forward basis.”
The Louisiana Government also notes that House Insurance Committee Chairman Mike Huval has agreed to file a bill during the upcoming Regular Session to appropriate additional funding for the program to meet the full amount companies have requested and are eligible to receive.
The Insure Louisiana Incentive Program is designed to offer matching grants to incentivize insurers to write residential and commercial policies in coastal areas, including writing policies out of Citizens.
Last week, Commissioner Donelon announced that participating insurers will receive credit toward the Insure Louisiana Incentive Program’s grant requirements for assuming UPC policies. Credit will also be given to companies who write policies for former UPC policyholders during the 30-day period after cancellation.
According to reports from American Press, approved companies will be contractually obligated to maintain coverage over a five-year period, and will be subject to solvency monitoring, which includes processes such as monthly reporting, in-depth reinsurance program reviews and premium limits in each parish.
There have been mixed responses to Louisiana’s efforts to reform its property insurance market, with analysts at AM Best warning that the measures announced so far are likely to be only a “short-term stopgap” rather than an effective long-term solution to its ongoing reinsurance issues.
