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MONTHLY REPORT
Volume 13, Issue 2
February 2013


Members

Commissioner Jim Donelon
Theodore "Ted" Haik, Jr., Chair
Jeff Albright, Vice Chair

Raymond J. Aleman, Sr.
Lee Ann Alexander
J.E. Brignac, Jr.
Paul Buffone
Stephen F. Campbell
Anne Cassity
Sheriff Greg Champagne
Representative Greg Cromer

Manuel DePascual (Alternate)
Louis G. Fey, Jr.
Michael Guy
Lance "Wes" Hataway
Ron Henderson
Senator Eric LaFleur
Scott Landry
LTC John A. LeBlanc
Ann Metrailer (Alternate)
Robert Moorman
Senator Dan "Blade" Morrish
Chris Roy, Jr.
Representative Kirk Talbot
Earl Taylor


Staff


Terrell B. Moss, Director

David Evans,
Supervisor/Research Analyst

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Farmers Group Making Changes in Louisiana

Farmers Insurance Exchange is dropping its homeowners and auto policies in Louisiana.  The announcement will affect around 23,000 homeowner policies and approximately 7,000 auto policies.  The company cited substantial losses in the homeowner’s market as a major reason for pulling out of Louisiana.  The company will stop renewing current policies on April 27th which means it will be out of the state’s market by April of 2014. 

“I am totally confident, and I told them this when we met last month, that we can readily find places for their policyholders with other companies looking for business in our homeowner’s market, “ Commissioner Donelon said.  Another insurance company has already expressed interest in taking over Farmers Insurance Exchange’s homeowners business. For the 7,000 auto insurance customers, Louisiana has plenty of competition for those policies to be absorbed into the existing market.

Additionally, a Farmers spokesman reported to The Advocate that the group’s Foremost, Bristol West and 21st Century Insurance companies – which have more than 100,000 policies in the state - won’t be affected by the Farmers Insurance Exchange decision.

Farmers Insurance Exchange has about 2.4 percent of the homeowner’s market in Louisiana and .2 percent of the auto business.


LPCIC Reviews Mississippi and Alabama Wind Pools

The LPCIC met recently at the Department of Insurance to receive testimony on the Mississippi and Alabama wind pool associations.

Invited to represent the Mississippi Windstorm Underwriting Association was Joe S. Shumaker, Manager and representing the Alabama Insurance Underwriting Association was Robert W. Groves, Secretary/Manager. 

Mr. Shumaker provided the history of residual markets in general, the evolution of the state’s wind pool, post-Katrina growth and efforts to mitigate its exposure.

Similarly, Mr. Groves related the history, growth and efforts to reduce exposure of Alabama’s wind pool. In addition, he pointed out the differences between the two states’ wind pools.

On a national level, Alabama ranks ninth, Mississippi seventh and Louisiana fifth in size, in terms of 2010 written premium. 

Considerable discussion followed on issues of funding mechanisms, agent compensation, coverage limits and comparisons to Louisiana Citizens Property Insurance Corporation.

Click here to view presentations from Mississippi and Alabama.

Electronic Proof of Auto Insurance

One of the hottest legislative trends of 2013 is allowing electronic proof of liability insurance coverage on your cell phones. In 2012, Louisiana was among the first in a group of six states (Alabama, Arizona, California, Idaho and Minnesota) to allow this kind of verification.  This year more than 20 states are considering passing this form of legislation. 

The use of electronic identification cards is often more convenient for consumers and insurers. If you always have your phone with you, you always have your card with you according to a Property Casualty Insurers Association of America spokesperson. It may also reduce time spent by courts and law enforcement addressing tickets issued simply because drivers forgot to put the card in their cars.