Governor Blanco, Commissioner Donelon Award 1st Round of Insure LA Incentive Program Grants
Released: January 11, 2008
Governor Kathleen Babineaux Blanco and Commissioner of Insurance Jim Donelon
took another step to improve the state’s property insurance crisis
today by awarding grants to companies that will write new homeowners
and commercial property insurance policies.
Five insurers received grants totaling $29 million as part of the Insure
Louisiana Incentive Program passed in the 2007 Legislative Session as part
of the Blanco-Donelon package to address property insurance availability
and affordability concerns following Hurricanes Katrina and Rita. This
economic development plan is designed to attract more property and casualty
insurers to Louisiana and to increase the private market capacity by 15%.
Attending today’s press conference were:
Marc Carter, Imperial Fire & Casualty Ins. Co. of Opelousas; $ 5 million
Joe Graganella, Southern Fidelity Ins. Co. of Tallahassee, FL; $ 7 million
David Pirrung, Occidental Fire & Casualty Ins. Co. of North Carolina
(Raleigh); $ 10 million grant award.
Mary Francis Fournet, ASI Lloyds of St. Petersburg, FL; $ 5 million grant
A representative of Companion Property and Casualty (Columbia, S.C.) was
unable to attend. That company received a $2 million grant award.
During today’s press conference, Governor Blanco said, “Over
the past two years, Commissioner Donelon and I joined forces to tackle
the insurance crisis facing our state. We set out to create a competitive
regulatory environment while ensuring that our citizens are afforded adequate
consumer protections and benefit from personal investments that strengthen
their property. We travelled the country, lobbying every facet of the insurance
industry to tell Louisiana's story of rebuilding safer, stronger, and smarter.
Today, we present the first round of grants under the Insure Louisiana
Incentive Program, part of our plan to bring new companies to the Louisiana
market. These companies will spur competition and improve the availability
and affordability of property insurance in this state."
Commissioner Donelon added, “I’m just thrilled. This is success
beyond our expectations.” Commissioner Donelon further stated, “We
need strong, viable, regional players like these five companies to come
into our market and meet our demand. I cannot be more proud of our accomplishments
and I am thankful to Governor Blanco for all of her hard work and leadership
during this critical time on this most important issue.”
Because not all of the Incentive Program funds allocated by the Legislature
were awarded in the first round that ran October 2-November 1, 2007, a
second round of applications will be accepted for the remaining $71 million
in Incentive Program grants from February 4-March 3, 2008.
Details of the Incentive Program are as follows:
• It will provide matching funds to qualified property insurance
companies from a $100 million state fund.
• During the initial application phase, individual grants allocated
were no less than $2 million nor in excess of $10 million.
• The Commissioner must allocate 20% of the total amount of funds
available for grants to domestic insurers.
• A second invitation for grant applications will be issued by the
Commissioner since all monies in the fund were not allocated in the first
invitation for grant applications.
• In the second invitation, the Commissioner shall not allocate
individual grants less than $2 million nor in excess of $10 million.
• Insurers who have been allocated a grant in response to the first
invitation may apply for an additional grant up to a cumulative of the
$10 million limit.
• At least 50% of the net written premium shall be received from
policyholders whose property is located in the 37 parishes included in
the federal Gulf Opportunity Zone Act in Louisiana.
• Insurers must also write 25% of the net written premium for policyholders
whose property is insured by the Louisiana Citizens Property Insurance
Corporation (Citizens). And at least half of this 25% must be policyholders
whose property is located in parishes included in the Gulf Opportunity
Zone Act in Louisiana.
Commissioner Donelon says other rules and conditions for the program apply
as outlined in the legislation and in Department of Insurance Regulation
82 posted on the Department's Web site at www.ldi.state.la.us. "Look
for the Insure Louisiana Incentive Program logo under New Information on
the front page of the Web site," Donelon adds. In addition to Regulation
82, the public invitation notice and application are also posted there.
Commissioner Donelon says that any company not currently licensed to write
property insurance in Louisiana may apply for participation in the program
conditioned on the submission of a simultaneous application for authority
to write the eligible lines of business.
As was done in the first round, a decision on grant awards will be made
by Department of Insurance officials with all approved applications being
forwarded to the Louisiana Joint Legislative Committee on the Budget for
review and approval before any monies can be disbursed.