Louisiana insurance incentive program to provide $62M in grants | Louisiana

(The Center Square) — Nine companies are seeking $62 million in grant money through a recently funded Insure Louisiana Incentive Program designed to address the state’s insurance crisis, officials announced Tuesday.

Louisiana Insurance Commissioner Jim Donelon held a press conference with legislative leaders in Baton Rouge to provide an update on the incentive program, which lawmakers funded with $45 million during an extraordinary session last month.

The incentive program, first created in 2005 to address an insurance crisis following hurricanes Katrina and Rita, is designed to provide grants of between $2 million and $10 million to lure underwriters, which will be required to match the funds to write policies in the state.

Donelon said “the round one application period was more than the hoped for success” for the program, drawing requests from nine insurers seeking a total of $62 million in grant money.

Grant requests included three for $10 million each, with others for $6.5 million, $6 million, $5 million, and $2 million. If approved, the companies would be required to write a total of $180 million in new premiums and maintain that level for five years, Donelon said.

“We began the process (for approvals) as they were coming in,” he said. “If all goes well, they would be able to begin writing policies next month.”

Lawmakers are expected to introduce legislation to expand funding for the program to meet the $62 million in requests, but officials plan to distribute the $45 million on a pro-rata basis until the additional funding is secured, Donelon said.

The failure of numerous Louisiana property insurance companies has driven up the number of policies at Louisiana Citizens, the state’s insurer of last resort, from about 36,000 policies before Hurricane Laura in 2020 to about 125,000 policies. Louisiana Citizens is mandated by law to be

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Louisiana Insurance Commissioner will not seek reelection

BATON ROUGE, La. (AP) — Longtime Louisiana Insurance Commissioner Jim Donelon, who was tasked with finding solutions to lower property insurance costs that have been plaguing the state, announced Tuesday that he will not seek reelection in October.

Donelon, a Republican, has been thrust into the spotlight amid the state’s ongoing property insurance crisis, which was exacerbated by devastating hurricanes in 2020 and 2021. However, even as Donelon laid out plans to potentially strengthen the state’s struggling homeowners insurance market and decrease premium costs, he said his time in the Louisiana Department of Insurance — where he served as commissioner for a record 17 years — is coming to an end.

“(I) have spent almost 50 years serving the public of Louisiana,” Donelon, 78, said Tuesday. “I want to enjoy the remaining years of my life with my family and hopefully some new hobbies.”

Donelon’s surprise announcement comes a month after lawmakers approved of allocating $45 million to an incentive program designed to entice more insurers to Louisiana. Over the past few years, a dozen homeowners insurance companies fled the state and another dozen went insolvent following hurricanes Delta, Laura, Zeta and Ida. The storms’ destruction generated a combined 800,000 insurance claims totaling $22 billion.

As a result, thousands of residents have been forced to turn to Louisiana Citizens Property Insurance Corporation — the state-run insurer, which is the most expensive option. Currently the corporation has 120,000 residential policies — compared to 41,000 policies in 2021 — and the average annual property insurance premium has soared to $4,400. Nationally, the average annual premium for property insurance in 2019 was $1,272, according to the most recent data from the Insurance Information Institute.

Under the state’s incentive program, qualified companies will be awarded grants between $2 million and $10 million. In

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