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 grant award.

Joe Graganella, Southern Fidelity Ins. Co. of Tallahassee, FL; $ 7 million grant award.

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 award.

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.