A Louisiana House of Representatives committee recently approved two proposals to reduce the number of homeowners insurance policies written by the state-backed company known as the “insurer of last resort.”
Sens. James David Cain and Reggie Dupre are sponsors of separate plans intended to sell off policies written by Louisiana Citizens Property Insurance Corp. to private firms. Cain hopes to sell off all the policies; Dupre’s measure would allow the state Insurance Department to collect hundreds of policies to be sold to private firms as packages.
It’s not clear whether either plan would work: a majority of Citizens policies are in coastal parishes, risky territory for insurance companies wary of homeowners claims after hurricanes.
Cain acknowledged to the House Insurance Committee that his plan is not guaranteed to work, but argued that it’s worth a try to drastically reduce the amount of risk carried collectively by all homeowners in the state. In the case of massive claims from Citizens after a hurricane, the costs are passed on to all Louisiana homeowners by way of fees – known as “assessments” – that appear on their insurance bills.
“You’re great, great, grandkids are going to be paying for this if we don’t stop it,” said Cain, R-Dry Creek.
Jim Donelon, state insurance commissioner, is supporting Dupre’s bill. He told the committee no insurers have indicated any interest in acquiring all of Citizens’ business. If the policies are packaged together, to include properties inside and outside hurricane-prone areas, private firms might be interested, he said.
The bills by Cain and Dupre, D-Houma, move to the House floor for debate.
Senate Bills 153 and 196 can be viewed at http://legis.state.la.us/.
Was this article valuable?
Here are more articles you may enjoy.