Insurance Commissioner Jim Donelon won’t seek re-election | Business News

Amid a historic crisis in Louisiana’s property insurance marketplace, Insurance Commissioner Jim Donelon said Tuesday morning that he will not seek re-election to a fifth full term this fall.

The surprise announcement comes as Donelon, a Republican from Metairie, attempts to sort out a near-collapse of Louisiana’s property insurance market. Since 2020’s Hurricane Laura, a dozen insurers writing business in the state have failed, and more than a dozen others have stopped writing business.

The result has been that the number of policyholders covered by Louisiana Citizens Property Insurance Corp., the state’s insurer of last resort, has more than tripled.

In hopes of reducing Citizens’ rolls, Donelon has revived a plan he implemented after Hurricane Katrina to offer state grants to incentivize insurance companies to begin writing business in the state. He was updating the public on that plan when he announced his impending retirement Tuesday.

Donelon said his age and the demands of responding to the insurance crisis in anticipation of the upcoming session were the two factors in his decision not to run.

At 78, Donelon is the longest-serving commissioner to hold the position that has been tainted by scandal; three of his predecessors were convicted and served time in federal prison.

“One thing that did play a factor is a state campaign takes a lot of time, and I haven’t had any time since late last year to put toward my re-election effort,” Donelon said Tuesday.

Donelon said he last held a fundraiser before the holidays in Baton Rouge.

“And since then I haven’t been able to lift a finger toward my re-election campaign because of the time that this crisis has demanded of me and my staff,” he said.

After Gov. John Bel Edwards convened a special session in February, the Legislature agreed — at

Read the rest

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

Read the rest

Can insurance companies pay claims for Hurricane Ian victims?

TAMPA, Fla. (WFLA) — One week after Hurricane Ian hit, tens of thousands of Floridians have property damage and are turning to their insurance companies hoping they’ll pay up.

The state’s insurer of last resort, Citizens Property Insurance Corporation, says it’s projecting to face up to $2.6 billion in losses to Ian. It’s expecting to handle 200,000 claims or more.

But whether you have Citizens or a private company, will they actually be able to pay up? 8 On Your Side Investigator Mahsa Saeidi went to a so-called “insurance village” in Port Charlotte to find out.

The state site, located in the Port Charlotte Town Center on Tamiami Trail, is open daily from 8 am to 6 pm It was created to help storm victims file their insurance claims.

The goal is to help policyholders deal directly with their insurance company, close the claim and walk away with a check. But the question is – will homeowners be able to cash the checks or will they bounce?

Hurricane Ian was the worst-case scenario for Florida’s troubled property insurance market. Even before the storm, the industry was dealing with billions in losses, rampant litigation and fraud. Just this year, six insurers went bankrupt.

8 On Your Side asked Gov. Ron DeSantis and Chief Financial Officer Jimmy Patronis this week if storm victims will get their claims paid out.

“There’s multiple redundancies in the state of Florida,” Patronis said.

“We have taken action to stabilize, and we will do more if we need to,” Gov. DeSantis said. “I mean, I will call another special session.”

State Sen. Jeff Brandes, a Republican from St. Petersburg, spearheaded the push for the first special session to address property insurance in May. Now, he believes there should be another.

In Port Charlotte on Wednesday, Mon. Brandes

Read the rest

During stop in Jacksonville, Crist discusses plan to take on property insurance crisis in Florida

JACKSONVILLE, Fla. – Charlie Crist, the Democratic nominee for Florida governor, held a news conference Wednesday in Jacksonville, saying he has tackled property insurance in Florida before and he would do it again as governor.

He said he plans to take on the property insurance crisis impacting thousands of Floridians by reversing rate hikes and expanding coverage. He wants to go back some of the things he did when he was governor of Florida — like bringing back the My Safe Florida Home Program.

Florida’s property insurance market has been in upheaval as insurers have dropped customers and sought huge rate increases because of financial losses. Five property insurers have been declared insolvent since February, and policies have poured into Citizens Property Insurance, which was created by the state as an insurer of last resort.

TELL US: Have you experienced an increase in your property insurance rates, or has your insurance company dropped you altogether?

Ad

While campaigning in Jacksonville, Crist criticized Republican Gov. Ron DeSantis and how he has handled the crisis, saying the governor is more interested in getting to the White House than protecting the Floridians’ homes.

“Gov. DeSantis created a property insurance crisis in Florida,” Crist said.

DeSantis called a special legislative session in May to address problems in the broader insurance system. Lawmakers made a series of changes, including trying to address roof-damage claims that insurers blame for increasing costs, trying to curb litigation costs about claims and creating a $2 billion program to provide additional reinsurance to private insurers.

News4JAX asked Christ what he plans to do differently.

“I called a special session just like Gov. DeSantis did. The difference was Gov. DeSantis had a special session that was really special for the insurance industry. He didn’t lower rates for you and me and

Read the rest

8th property insurance company pauses new business in Florida

TAMPA, Fla. (WFLA) — Another property insurance company announced Thursday it will be pausing new business in Florida “until further notice” amid the state’s ongoing homeowners insurance crisis.

According to a news release obtained by 8 On Your Side Investigative Reporter Mahsa Saeidi, American Traditions Insurance Company will temporarily stop taking new business starting next week. The pause impacts homeowners insurance policies, condo unit owners policies and dwelling policies often used by landlords.

In the release, the company noted that the changes are being made “in order to manage our exposure and remain consistent with our growth projections.”

The changes made to business are effective immediately, according to American Traditions. However, the company said it would honor any eligible quotes that were previously saved through the end of business day Aug. 5.

American Traditions is just the latest of several companies that have either paused new business in Florida or gone bankrupt amid the property insurance crisis impacting thousands of homeowners across the state. Those companies, according to July data from the state-backed Citizens Property Insurance Corporation, are:

American Traditions Insurance Company: Limiting new business

American Traditions announced Thursday it would be limiting new business in Florida, effective immediately.

Universal Property and Casualty: Limiting new business

Universal Property and Casualty has limited new business in Florida.

Progressive Home: Limiting new business

Progressive Home suspended new business in several Florida counties earlier this year.

Monarch: Limiting new business

Monarch, a FedNat company, limited new business in Florida earlier this year. FedNat Insurance Company and its sister companies canceled more than 68,000 policies in May to stay afloat, desperate to reduce exposure in Florida.

Heritage: Limiting new business

Heritage Insurance suspended new business in multiple Florida counties, including Polk County,

Read the rest

Demotech withdraws 2 more Florida insurance company ratings

TAMPA BAY, Fla. — Two more Florida property insurance companies lost their financial stability ratings from Demotech Wednesday.

The state’s rating agency, Demotech, withdrew ratings from Bankers Specialty Insurance And First Community Insurance, both of which are under the umbrella company of Bankers Insurance Group based in St Petersburg.

They closed new business in June and announced last week that they were pulling out of the Florida homeowners insurance market altogether, stating in a press release:

“Recent legislative measures, unfortunately, failed to adequately address the immediate financial challenges faced by property and casualty insurers, including combating fraud and litigation which exponentially outpaces every other state.”

An NR or ‘no rating’ from Demotech is often bad news for a company.

“The point of a rating is to show financial stability that you are a solid company that can pay your claims and with no rating, a company cannot show that, that’s just not possible. So in most cases when we see a rating withdrawn, that is the first step towards insolvency,” explained Mark Friedlander, spokesperson for the Insurance Information Institute.

This comes after two other companies lost their ratings on August 1 and three others were downgraded.

RELATED: Demotech downgrades 1, withdraws 2 Florida property insurance ratings so far

The agency withdrew ratings for Weston Property Insurance, which previously had an “A” and FedNat, which had previously been downgraded in April from an “A” to an “S” substantial.

Demotech downgraded United Property & Casualty Insurance (UPC) from an “A” meaning exceptional, to an “M” meaning moderate.

The agency also downgraded Florida Family Insurance Company from an Aʹ (A Prime) to A and Florida Family Home Insurance Company from an Aʹ (A Prime) to A. However, these specific downgrades will not affect the company’s operations in the state since they are still

Read the rest

Few see quick relief in property insurance crisis

At the end of May, the Florida Legislature was called into a special session by the Governor to address the property insurance crisis in Florida, which is creating havoc for homeowners.

More Around the House: Top 7 tips for surviving the aftermath of a hurricane

Deals on doors: Look for the summer sales in home improvement

Monthly, homeowners across the state are being dropped by insurance companies pulling completely out of the state, or they are seeing premiums skyrocket for the same coverage, or they cannot find coverage for their home’s roof, which was installed more than 15 years ago.

Homeowners are being forced to self-insure, which means they have no private insurance and must be diligent about setting aside money to pay for any storm damage, replace older roofs in good condition, or get insurance through the Citizens Property Insurance Corporation. This quasi-public private program is known as the insurance of last resort.

The problem with the Citizens Property Insurance Program is that many legislators and experts contend the program’s $3 billion in reserves is inadequate for potential liabilities in the event of a major hurricane, which could leave homeowners or the taxpayers helpless in the aftermath of a disastrous storm.

The bill approved by the Florida Legislature and Governor addressed long-term issues which may, in time, provide help to homeowners. Still, most agree that immediate help is not eminent or certain. The bill attempts to reel in bad faith litigation by limiting assignment of benefits, allowing for potential different deductible options for older roofs, and creating a reinsurance program to encourage companies not to leave the state.

Plus, the legislation restricts insurance companies from arbitrarily requiring roof replacements and provides homeowners an opportunity through independent inspections to prove their roofs are in good shape. These measures, if not

Read the rest