PIA of La. Resolutions Seek Hurricane Relief Assistance

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Thanking insurance carriers on behalf of Louisiana insurance agents and the policyholders they represent for the carriers’ hard work and assistance in the aftermath of Hurricanes Katrina and Rita, the Professional Insurance Agents of Louisiana released a pair of resolutions adopted by its Board of Directors designed to facilitate further cooperation between agents and carriers during the next round of challenges in the continuing recovery effort.

The two resolutions adopted by the PIA of Louisiana Board of Directors solicit assistance from carriers to meet recovery objectives.

The first, Resolution 1-2005, deals with how carriers can help agents assist the policyholders’ needs. Because of the reconstruction challenges facing this area, the association urges carriers to make considerations for the 180-day replacement cost feature in policies affected by the storms.

The second, Resolution 2-2005, deals with how insurance companies can directly assist the agents during this financially trying time. Because of the financial burden that has been placed on the agents, PIA is requesting that carriers not charge back the unearned commissions on policies cancelled because of the devastation of properties in these affected areas.

The association reported that PIA’s Platinum Partner, Drive Insurance from Progressive, has made a favorable decision regarding this issue. The company pays the full six-month commission on policies when written and since policies are not being cancelled during the moratorium, both premium and commission are being earned on those policies throughout the moratorium. The company has said customers that don’t pay them at the end of the moratorium for coverage provided during this time will be cancelled following the end of the moratorium period. However, commission earned on these policies while in-force during the moratorium will not be charged back to the agent’s commission statement. Drive Insurance plans to absorb the commission on these policies as a small part of the total catastrophic loss.

Urging other carriers to follow Drive Insurance’s lead, PIA stated in its bulletin: “We know you have your own challenges and we hope you feel PIA of Louisiana and its members have tried to help you by being involved in the legislative, regulatory and judicial arenas to make Louisiana a friendlier place to do business. Our work is certainly not done and the fight will continue and become even more important in the near future. We do consider carriers as partners in these efforts and hope you will be receptive to our requests now. The two issues outlined in these resolutions are extremely important to the agents and policyholders of Louisiana.”

The PIA of Louisiana resolutions are as follows:

RESOLUTION 1-2005
To extend the 180-day Replacement Cost feature for policies
in the affected storm areas.
WHEREAS, Hurricane Katrina is the most catastrophic storm on record, soon followed by Hurricane Rita;
WHEREAS, policyholders are still displaced from its wrath;
WHEREAS, contractors and building supplies are in extreme demand;
WHEREAS, the members of the Professional Insurance Agents of Louisiana represent these stricken policyholders;
BE IT RESOLVED, that the Professional Insurance Agents of Louisiana urge the replacement cost feature in all affected insurance policies be extended indefinitely in lieu of the 180-day replacement restriction.

RESOLUTION 2-2005
To not charge back agencies for unearned commissions for policies written in affected storm areas.
WHEREAS, Hurricane Katrina is the most catastrophic storm on record, soon followed by Hurricane Rita;
WHEREAS, many homes and businesses have been totally destroyed, which will result in many policyholders not returning to these properties;
WHEREAS, it is the agent’s obligation to continually service their
policyholders;
WHEREAS, commission derived from these policies is the lifeblood of the agency;
WHEREAS, many of these policies will result in cancellation and/ or non-renewals;
THEREFORE, could result in financial ruin for the agency;
BE IT RESOLVED, that the Professional Insurance Agents of Louisiana urge carriers to not charge back the resulting unearned commissions on these policies for this figure could be included in the total catastrophic loss.