While Louisiana struggles to retain insurance markets and affordable coverage, the state’s lawmakers are targeting problems with the state’s insurer of last resort and building codes. A Louisiana State Senate committee has approved a bill to put Citizens Property Insurance Corporation up for sale and some House lawmakers want to make changes to building code regulations enacted in 2005.
The Senate Insurance Committee recently approved a bill by its chairman, Sen. James David Cain, that aims to reduce the number of policyholders in Louisiana Citizens Property Insurance Corp., which is financially backed by the state and insures homeowners and businesses who can’t find insurance on the private market.
Cain acknowledged that details of his plan need to be worked out, but he insisted that the bidding process would cost the state only $2,000 to $3,000 and could potentially allow state government to rid itself of the risk involved with insuring 150,000 homeowners and businesses.
“The time is now,” said Cain, R-Dry Creek. “It’s a proven fact that business can run it better than the state.”
That’s a popular sentiment in the Capitol, but it was unclear how much support Cain’s plan will get. Neither Gov. Kathleen Blanco nor Insurance Commissioner Jim Donelon, who are backing their own insurance bills, have taken a public position on Cain’s bill.
Kevin Cunningham, counsel for the American Insurance Association, a trade group, said his organization has not taken a position on Cain’s bill but supported the idea of privatizing Citizens.
Meanwhile, at least three lawmakers want to change Louisiana’s mandatory building codes for residences, instituted after the 2005 hurricanes, because of complaints that the rules impose harsh costs on new housing development.
The Legislature enacted the code in November 2005, in the belief that uniform rules for home construction would prevent future hurricane devastation and hold down insurance rates by lowering the risk that the properties would be damaged.
At the time, opponents said the code would add to the cost of building a home and burden local governments that don’t have the resources to enforce it.
Bills in the current legislative session echo those warnings and seek to ease the cost of the higher building standards, and particularly the cost of the inspection fees that certify that the codes were followed.
Rep. Gil Pinac, chair of the House Commerce Committee, oversaw the first of several hearings Tuesday on his bill that aims to simplify the inspection process. Lawmakers from north of Interstate 10, particularly those representing rural areas, have complained that the code has led to unpredictable, overly expensive inspection fees.
“There is no consistency of fees,” said Rep. Billy Chandler, D-Dry Prong. “We’ve got to have consistency of the fees.”
Pinac, D-Crowley, said his committee would vote on his bill in two weeks at the earliest.
Reps. James Fannin, D-Jonesboro, and Taylor Townsend, D-Natchitoches, have also filed bills to change the code. Both of those measures would exempt central and northern Louisiana parishes from some of the codes, eliminating the requirement that new homes in those areas must be built to withstand winds of up to 110 mph.
Senate Bill 195 House Bills 267, 278 and 704 are posted at http://legis.state.la.us/.
Was this article valuable?
Here are more articles you may enjoy.