Anger over new fees meant to help recovery from last year’s hurricane claims is no reason to tinker with 2003 state laws creating Louisiana’s state-run insurance company, the company’s chairman said Oct. 30.
The Louisiana Citizens Property Insurance Company, a quasi-state insurance firm for those who can’t get homeowners policies on the open market, has imposed a 15 percent “assessment” fee on private insurance companies, which have passed the fee on to their policyholders.
The money raised goes toward Citizens recovery from a deficit of $825 million caused by hurricane-related claims.
The fee has angered homeowners, but Citizens chief Chad Brown said lawmakers should refrain from changing the rules that allowed responsibility for paying the assessment to fall on policyholders.
Brown told the Press Club of Baton Rouge that shifting that responsibility to insurance companies could make the firms reluctant to do business in Louisiana – as would changing the law that allowed the companies to raise rates by less than 10 percent without approval from the state regulatory board, he said.
Brown said those two 2003 laws were among the ways Louisiana has encouraged firms to write more policies in the state, which has led to stabilized rates.
Brown also said Citizens is planning its future without assuming a large chunk of state money is on the way, to help its bailout. Gov. Kathleen Blanco, lawmakers and other elected officials have floated ideas for using various sources of state money to help Citizens recover from last year’s claims.
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