Louisiana Gov. Kathleen Blanco on July 20 vetoed legislation to sell off all policies covered by the state “insurer of last resort,” a bill that conflicted with her own plan to reduce the size of the firm.
The bill by Sen. James David Cain, R-Dry Creek, would have allowed the state to put up for auction the policies written by the Louisiana Citizens Property Insurance Corp. The measure drew opposition from Insurance Commissioner Jim Donelon – a political foe of Cain – who said no insurer has shown interest in acquiring all of Citizens’ business.
Citizens, backed financially by the state, has expanded since the 2005 hurricanes, leaving taxpayers responsible for the risk of future storm damage. The company is now the third largest property insurance company in Louisiana.
Blanco supported a bill by Sen. Reggie Dupre, D-Houma, to reduce the size of Citizens incrementally, not all at once. In vetoing Cain’s bill, she said selling off chunks of Citizens’ business would work better.
Dupre’s bill “provides the better approach to depopulating Louisiana Citizens,” Blanco said in her letter announcing the veto.
Under that legislation, Donelon’s office will periodically offer “bundles” of 500 Citizens policies, at auction, to private insurance firms. The policies will include some from coastal areas, where insurers are leery of writing, and from areas farther north, policies that carry smaller risk of storm damage and hurricane insurance claims.
Blanco has already signed the Dupre bill.
Was this article valuable?
Here are more articles you may enjoy.