Commissioner Donelon Announces Procedures for the Depopulation of Louisiana Citizens Property Insurance Corporation
Released: March 31, 2008
Procedures involving the first round of depopulation of Louisiana Citizens Property Insurance Corporation (LCPIC) were established at a meeting at the Louisiana Department of Insurance on March 14th, 2008. Those participating in the discussion were representatives of the Louisiana Department of Insurance, depopulation insurers (both Insure Louisiana Incentive Program and non Insure Louisiana Incentive Program companies), insurance agents and LCPIC.
“This is great news for Louisiana since we will not only see competition among insurance companies for existing Louisiana Citizens policies, which will move the State toward getting out of the property insurance business, but we will also see competition for new property and casualty policies not currently held by Louisiana Citizens,” said Commissioner Donelon of the implementation of the first round of the policy depopulation activity for Louisiana Citizens.
The following are key issues that were established for this process:
Important Dates
Between March 15, 2008 and April 15, 2008 the depopulation companies will work with agents to seek final agent approval on individual policies (while agents may represent multiple depopulation insurers they should not give approval to more than one depopulation company for any individual policy). Agents should delete any policies that are duplicates and should not be taken out, or which do not meet underwriting criteria and should remain in Citizens.
On or before May 1, 2008 the depopulation insurer will provide LCPIC with their list of selected policies that have been approved for take out by the agent.
Between May 1, 2008 and June 1, 2008 LCPIC will analyze the various lists and mark the agent approved policies for take out with the appropriate depopulation company. Any policies with duplicate selections will be sent to the agent (with a copy to the companies) for determination as to which depopulation company should be the assuming depopulation company.
Prior to June 1, 2008 agents and policyholders will be formally notified of the assumption and subsequent non renewal by both the depopulation insurer and LCPIC. It is planned to accomplish this in a single mailing.
On June 1, 2008 LCPIC will issue Assumption Agreements to the depopulation companies covering the selected policies.
The Assumption Agreements will have a retroactive effective date of March 1, 2008. While LCPIC and its service providers will adjust claims until June 1, 2008, depopulation insurers will be responsible for reimbursement of losses incurred from March 1, 2008 until June 1, 2008. New claims adjusted by LCPIC between March 1, 2008 and June 1, 2008 will be handled to completion by LCPIC with oversight by the take out companies.
LCPIC will continue to renew policies on LCPIC paper until October 1, 2008 when depopulation carriers will provide renewals on their paper. Depopulation carriers will have access to the policies from June 1, 2008.
The Louisiana Department of Insurance requirements of companies in the incentive program should be met by February 28, 2010. Future depopulation rounds will occur later in the year.
Key Points Producers Will Consider When Selecting New Companies for Policyholders
Agents will be making decisions for the policyholders when reviewing proposals from more than one depopulation company on insurance policies. They will discuss with depopulation companies such things as:
* Financial stability of the depopulation insurers.
* While it is expected rates and forms will be at least as good as Louisiana Citizens Property Insurance Corporation - agents should have this discussion with the depopulation insurer.
* A key issue in handling renewals will be insurance to value (ITV) – agents should evaluate any impact of ITV on renewal premiums.
* Other products the depopulation insurer will provide or require.
* Review of business methods of the depopulation carrier(s).
* Acceptable agent contracts and compensation.
* When the depopulation insurer begins to write policies on their paper it is expected they will handle these conversions as renewals; however, this should be reviewed with the depopulation insurer.
* It is the agent’s responsibility to select the depopulation insurer. While agents may represent multiple depopulation insurers they should not select multiple carriers on the same individual policy.
Individuals who are now insured with LCPIC may contact staff with the LDI, LCPIC, agent associations or depopulation companies if they have any questions regarding their insurance policy. Contact numbers are as follows:
LOUISIANA DEPARTMENT OF INSURANCE
1. Denise Brignac; phone: 225.342.7276; e-mail: dbrignac@ldi.state.la.us
2. Caroline Brock; phone: 225.342.1631; e-mail: cbrock@ldi.state.la.us
3. Ed O’Brien; phone: 225.342.5203; e-mail: eobrien@ldi.state.la.us
LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION
1. John Wortman; phone: 504.831.6930 ext. 1301; e-mail: jwortman@lacitizens.com
2. Vijay Ramachandran; phone: 504.831.6930 ext. 1306; e-mail: vramachandran@lacitizens.com
AGENT ASSOCIATIONS
1. Independent Insurance Agents & Brokers of Louisiana; Jeff Albright; phone: 225.819.8007;e-mail: jalbright@iiabl.com
2. Professional Insurance Agents of Louisiana, Inc.; Jody Boudreaux; phone: 800.349.3434; e-mail: jody@piaoflouisiana.com
DEPOPULATION COMPANIES
1. Americas Underwriting Agency; Joe Deutsch; phone: 318.450.9966; e-mail: jedeutschla@yahoo.com
2. ASI Lloyds (ASI); Angela York; phone: 866.274.8765 ext. 853; e-mail: marketing@asicorp.org
3. Companion Insurance Company; Rex Boylston; phone: 803.735.0672 ext. 45308; e-mail: rex.boylston@companiongroup.com
4. HomeWise Insurance Group; Dale Hammond; phone: 813.202.8619; e-mail: dale.hammond@homewiseinsurance.com
5. Imperial Fire & Casualty Insurance Company; Paul Harrison; phone: 214.329.4630; e-mail: Paul.Harrison@imperialfire.com
6. Occidental Fire & Casualty Company; Beth Stone; phone: 800.780.8423 ext. 1022; e-mail: dcruikshank@baisi.com
7. Southern Fidelity; Kirk Luchman; phone: 866.471.8855 ext. 224; e-mail: kluchman@southernmanaging.com