La. Senator Says Insurance Department is Doing Too Little – Too Late

May 19, 2006

Senator James David Cain, chairman of the Louisiana State Senate Insurance Committee, reacting to the announcement of investigations into insurers’ claims practices by the Louisiana Department of Insurance, says he appreciates “that the department has finally started to come around and now realizes that we have tremendous problems to solve. But this is too little and it’s way too late.”

Ten months after Hurricane Katrina, the Louisiana Department of Insurance has announced that it will begin investigating complaints filed by homeowners across Louisiana on two insurance companies.

And then, after the investigation is complete, and only after, it will begin investigating the Louisiana Citizens Property Insurance Corporation (Citizens). Citizens is actually overseen by the Louisiana Department of Insurance and therefore they would be investigating themselves, Cain said.

According to Sen. Cain, “They should have begun an internal investigation of Citizens Insurance Corporation months ago. The state can’t afford to wait for some date that is to-be-determined in the future.”

The citizens of Louisiana face an urgent problem and they need immediate relief.

According to Sen. Cain, “Citizens Insurance Corporation should immediately turn over all of their records to the legislative auditor’s office. It’s time for them to let an independent party review the situation.”

By statute, the chairs of the House and Senate Insurance Committees and the Commissioner of Insurance, or their designees, all serve on the Citizen’s Board. Sen. Cain resigned earlier this year and appointed a designee, citing a lack of an audit by the Louisiana Legislative Auditor. Citizens is required, by law, to submit their financial records to the legislative auditor but has not done so.

“They haven’t gotten an audit of the financial documents on this corporation since its inception, even though the audit is required by law. We have no way of knowing if money was being mishandled. I simply refused to serve on a board that won’t provide basic financial information to their board members. They can’t expect people to serve on a board when the company won’t follow the law,” Cain said .

Source: Senator Cain’s Office

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