(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