Nine insurers have applied to participate in a Louisiana state program to shore up the state's flagging property insurance market.
The companies that applied for the Insure Louisiana Incentive Program requested a total of $62 million in grants, $17 million more than the $45 million in funding for the program that was initially approved by the state Legislature, Insurance Commissioner Jim Donelon said at a March 14 press conference.
State Representative Mike Huval, chairman of the House Insurance Committee, will introduce legislation to provide additional funding for the program "so that we can take full advantage of the amount of new premium these companies are willing and able to write," Donelon said.
The program provides grants of between $2 million and $10 million to eligible insurers in an effort to revitalize the property insurance market in the Pelican State and lower the growing volume of business written by the Louisiana Citizens Property Insurance Corp., the state's insurer of last resort.
Insurers who applied for the grants included Safepoint Insurance Co., Constitution Insurance Co. LLC, Applied Underwriters Inc. and SureChoice Underwriters Reciprocal Exchange, which requested $10 million each. Allied Trust Insurance Co. requested $6.5 million, while Cajun Underwriters Reciprocal Exchange and Elevate Reciprocal Exchange are seeking $5 million each. Gulf States Insurance Co. (LA) applied for a grant worth $3.6 million, and Safeport Insurance Co. is seeking $2 million.
Companies approved for the grants must match the amount they receive and write at least two times that combined amount in new premiums. The companies are required to keep those new premiums for at least five years.
The insurers approved also will receive credit toward their grant requirements for taking over policies written in Louisiana by United Property & Casualty Insurance Co.. The former United Insurance Holdings Corp. subsidiary was placed in receivership by a Florida circuit court for purposes of liquidation in late February.
Donelon said the screening process has already begun, and the names of the companies approved by the department will be forwarded to the Legislature's Joint Legislative Committee on the Budget.
"Once we receive approval from Joint Budget, we will be able to enter cooperative endeavor agreements with those companies and quickly issue funding," Donelon said. "If all goes well, they should be able to begin writing new policies as soon as next month."
Donelon also announced that he will not seek reelection in the fall as insurance commissioner. He said he wants to "remove politics from the vitally important upcoming legislative session, where many significant issues are affecting our state in the future of our state's property insurance market will be debated" and "to enjoy the remaining years of my life with my family, and hopefully, some new hobbies."
Donelon, 78, has been the insurance commissioner since February 2006.