Insurance Commissioner Donelon has ordered Horace Mann
Insurance Companies to halt unlawful cancellation or nonrenewal
of homeowners policies
Released: September 28, 2006
Commissioner of Insurance Jim Donleon has directed Horace Mann Insurance Companies
of Springfield, Illinois, to immediately cease the wrongful cancellation of homeowners
policies in 23 parishes and reinstate any policies that have been cancelled since
the Illinois-based insurer implemented this unlawful plan of action in July.
Commissioner Donelon has ordered Horace Mann to stop any further action toward canceling
or nonrenewing any homeowners policies in 23 designated Louisiana parishes on or
near the coast and reinstate any homeowners policies that have been wrongly cancelled
or nonrenewed under this improper course of action. Donelon further directed Horace
Mann to give him 30 days advance written notice of any future plans to cancel or
nonrenew Louisiana homeowners policies, stating that he will vigorously defend in
a court of law any continued violations.
At issue are Louisiana consumer protection provisions in R.S. 22:635.3 and 636.2
that protect policyholders from the cancellation or nonrenewal of a homeowners policy
that has been in effect for 3 years or longer. Horace Mann attempted to take this
action based on what it alleged was a material change in the risk due
to a number of storm-related factors including improperly maintained levees; coastal
erosion; damage to barrier islands; vacant lots; rising health risks; increased
liability exposure caused by house evacuees; and the large volume of hurricane-related
trash and debris. Commissioner Donelon vehemently disagreed and advised Horace Mann
that the material change in the risk must relate to the property being
insured, not the surrounding levees, barrier islands and other factors listed. Horace
Mann also claimed that the Act of God prohibition set forth in R.S. 22:1471 did
not apply. Commissioner Donelon advised the company that any claim due to Katrina
and Rita must be considered an Act of God claim and therefore not subject to cancellation
Horace Mann Insurance Companies sell homeowners policies primarily to educators.
It insures some 10,000 Louisiana homes with total written premium of around $10
Parishes affected: Acadia, Ascension, Assumption, Calcasieu, Cameron, Iberia, Iberville,
Jefferson, Jefferson Davis, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard,
St. Charles, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany,
Tangipahoa, Terrebonne and Vermilion.
Policyholders who have questions about the continuation of their Horace Mann homeowners
coverage in the above parishes should call their Horace Mann insurance representative
For additional insurance-related questions, call the Department of Insurance, nationwide,
toll-free number, 1-800-259-5300.