La. House Rejects Insurance Payment Plan for Upcoming Year

June 20, 2006

The Louisiana House of Representatives wouldn’t go along June 18 with a Senate-backed plan that could alleviate some insurance hikes around Louisiana in the upcoming year, saying the money would be better set aside for potential emergencies.

The Senate amended a spending bill, House Bill 1208, to set aside up to $50 million of a $150 million state emergency response fund pushed by Gov. Kathleen Blanco to help shore up the state-run insurer of last resort, Louisiana Citizens Property Insurance Corp. The dollars would only be used for Citizens if money is left in the fund after this hurricane season.

The insurance company, which offers homeowners insurance to those who can’t get it on the open market, is assessing private insurance companies a regular fee that they can pass onto all their Louisiana customers to pay off Citizens’ borrowing to cover claims after the hurricanes.

If up to $50 million of any remaining emergency fund dollars would be used to pay down some of the borrowing, it would lower the assessment on insurers and people who carry private insurance.

Rep. John Alario, chairman of the House budget committee, asked House members to send the spending bill to a legislative compromise committee to push the possible $50 million for Citizens back to July 1, 2007. Alario said Louisiana needs to get through an entire budget year with the full emergency fund, not just for hurricanes, but also in case of tornadoes, ice storms or other emergencies in Louisiana.

“There are various incidents that might happen,” he said.

Rep. Dan “Blade” Morrish, R-Jennings, said that would push insurance relief back for months and would leave the dollars susceptible to another legislative budget process where the insurance dollars could be stripped entirely.

“Wouldn’t it be better to help citizens of this state who have this insurance burden rather than putting it on shelf?” said Rep. Jim Tucker, R-Terrytown.

House members voted 52-32 against keeping the insurance dollars available immediately after hurricane season, instead sending it to the legislative compromise committee to rework the language in the final hours of the session.

House Bill 1208 can be found at

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