State Insurance Commissioner Jim Donelon pleaded for a special session to tackle Louisiana’s property insurance crisis, but faced a barrage of skeptical questions Friday from law enforcement officials. the House and Senate and other legislators.
Donelon, appearing before the powerful Joint Legislative Committee on the Budget, said a special session would pave the way for seven companies to start writing policies after eight stopped doing so amid a wave of costly hurricanes. these last years.
“There is no doubt that we are in the midst of a crisis and that is why today is so important,” said Donelon, himself a former House member.
“We need to have a special session as soon as possible,” he said.
But House Speaker Clay Schexnayder, R-Gonzales and Senate Speaker Page Cortez, R-Lafayette peppered Donelon with questions, including how the state would benefit from a special session that could begin Jan. 30 rather than to address the issue during the regular session. which begins April 10.
Governor John Bel Edwards said earlier this week that legislative sentiment after Donelon’s appearance would be a key factor in whether he calls the session, which could be limited to one bill and result in less than a week of meetings.
Donelon said quick action was needed so that insurance companies have time to put their own reinsurance in place before the start of hurricane season on June 1.
He also said the state’s action would ease pressure on Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort.
Donelon said Citizens covers around 125,000 residents versus around 65,000 expected and those homeowners are facing premium hikes of up to 50%.
He said legislative action could reduce the roles of citizens by around 50,000 policyholders.
But critics noted there was no guarantee how many companies would re-enter the market and how many policies they would write.
“From what I’m hearing right now, maybe they will,” Schexnayder said.
Donelon replied, “I would say probably.”
Edwards, Schexnayder and Cortez were due to confer after the meeting, meaning a decision on any additional legislative meetings could come as early as Friday.
A special session would cost taxpayers about $60,000 a day, officials said.
Donelon is asking lawmakers to pour $45 million into an incentive fund enacted in 2022 aimed at attracting insurance companies to the state.
These businesses would have to pay $1 for every dollar of state aid and would be required to continue operating for five years or be forced to return the aid to the state.
Check back with The Advocate for more details.