Legislature begins debate on creating lifelines for property insurance – InsuranceNewsNet

The state legislature began a special session on Monday to ensure residents have access to affordable homeowners insurance after several hurricanes upended the market.

The gathering, which must end with February 5 at 6 p.m.was limited to ceremonial duties on opening day ahead of Tuesday’s first substantive debate.

A House committee is expected to pass the key measure on Tuesday that would allocate $45 million to a state incentive fund to incentivize insurance companies to take out policies Louisiana.

House Appropriations Committee Jerome “Zée” ZeringueR-Houmais the sponsor of the three-page proposal — House Bill 1.

The Zeringue’s House neighborhood was among the heavily damaged areas when Hurricane Ida made landfall in August 2021, one of a series in 2020 and 2021.

As part of this plan, companies should put in place $1 for every dollar of state assistance.

Backers say the move is a short-term fix until bigger changes can be debated at the 2023 regular session, which begins April 10.

Govt. John Bel Edwards convened the extraordinary session on January 22.

State Insurance Commissioner Jim Donelon has been calling for a rally for months amid what he calls a crisis for homeowners unable to pay or obtain home insurance.

Edwards and the legislative leaders were initially reluctant to meet before the regular session.

What has changed, officials said, is the need for insurance companies to obtain their own reinsurance before the regular session and before the start of hurricane season on June 1.

Donelon said seven insurance companies have said they are interested in the incentive program.

Legislative headers hope to end the special session on Friday.

Gathering costs taxpayers approximately $60,000 per day.

The session aims in part to ease the pressure on Citizens Property Insurance Corp.the public insurer of last resort.

Policyholders who rely on Citizens are paying more than the market and rates have soared 63% on January 1staccording to a report released Monday by the legislative auditor Mike Wavespack.

Waguespack said the rise would have been 31% without reinsurance costs – what insurers pay to protect themselves if claims increase.

The report says insurance companies made big profits in 14 of the 18 years from 2004 – 32.5 cents in losses for each $1 premiums before reinsurance.

But the auditor said four of those years — 2005, 2008, 2020 and 2021 — showed losses of $4.40 for each 1 dollar bonuses for companies.

“The two-year period of 2020 and 2021, with consecutive years of significant disasters in different parts of the state, has placed an exceptional burden on the property insurance market,” Waguespack said.

The review is intended to help legislators at the start of their special session.

It says whether the Legislature has allocated $50 million to Citizens Property, this could pave the way for the insurer to increase its reinsurance up to $204 million or provide relief to policyholders.

Citizens has about 125,000 seniors, which is about double the normal enrollment, experts say.

Check back with The Advocate for more details.