La. Governor Meets With Insurers About Hurricane Problems

Gov. Kathleen Blanco met with representatives of at least a dozen of Louisiana’s largest property insurers on Aug. 17, hoping to ease jitters and keep them in the state after hurricanes Katrina and Rita.

Blanco wants to hear the companies’ concerns, improve affordability for Louisiana residents and make sure homeowners coverage remains available in the state, said the governor’s deputy chief of staff, Kim Hunter Reed.

The costs of claims and damage after the back-to-back storms is driving up the costs of homeowners’ insurance around the state and driving some companies out of the business of offering property insurance in south Louisiana. Katrina alone caused more then $24 billion in insured losses in Louisiana, according to insurance modeling firm ISO.

Reed said the two-hour meeting at the state Capitol would include the governor’s staff, Louisiana Insurance Commissioner Jim Donelon and representatives of the 12 largest insurers in Louisiana, their trade groups and the independent insurance agents’ organization. The meeting was closed to the public.

“Insurability is critical to recovery. We’ve got to focus on it,” Reed said.

Donelon said a yearlong break on the Gulf Coast from catastrophic storms the likes of Katrina would help tremendously to reassure insurers that it’s safe to do business in Louisiana.

“It’s going to take a whole lot of Band-Aids to repair our market, and I’m anxious to get any suggestions from any and all sources that are out there that are willing to help us,” Donelon said.

State Sen. James David Cain, a candidate running against Donelon for insurance commissioner in next month’s election and chairman of the Senate Insurance Committee, complained that the meeting didn’t include lawmakers on the House and Senate insurance committees.

“It seems that the purpose of this ‘private meeting’ is to come to an agreement with big insurance companies about what Louisiana laws should look like, then call for an insurance summit to rubber stamp decisions made behind closed doors,” Cain said in a news release.

Blanco’s staff and Donelon described the meeting as fact-finding only.

Reed said Blanco hasn’t decided whether she will hold an insurance summit, as requested by state Rep. Karen Carter, head of the House Insurance Committee. Reed said Blanco didn’t plan a decision on the summit until talking to more industry representatives.

At the same time as the governor’s meeting, a federal judge was scheduled to determine whether a new insurance law giving homeowners an additional year to sue their insurance companies for damages from the storms should be challenged in federal or state court.

State Attorney General Charles Foti wants a state district court in Baton Rouge to make the determination, but Allstate Corp. wants that decision made by a federal judge. U.S. District Judge James Brady was to hear arguments from both sides Aug. 17.

The Legislature passed laws this year to give homeowners until Sept. 1, 2007, to file lawsuits against their insurance companies for damages caused by Katrina and Oct. 1, 2007, to sue for damages from Rita – about 12 months longer than the old law allowed.

Since then, Donelon said he has received assurances from almost all of the 385 companies writing homeowners insurance in Louisiana that they will give homeowners more time to settle their Katrina and Rita claims. The lengths of time granted vary by company, however.