Released: June 11, 2008
The four insurance
companies participating in the Insure Louisiana Incentive Program
and another insurer have started the
process of removing property insurance
policies from the Louisiana Citizens Property Insurance Corporation (Citizens).
A total of 26,595 policies have been selected to be removed from Citizens
by ASI Lloyds, Imperial Fire & Casualty Insurance Company, Occidental Fire & Casualty
Company, Southern Fidelity and non-Incentive Program insurer Americas Underwriting
This depopulation of Citizens is a direct result of the Insure Louisiana Incentive
Program, created by the Legislature in 2007 to increase the availability of
property insurance in Louisiana and to decrease the business written through
Citizens. The Incentive Program provides matching grants of $2 to $10 million
to qualified insurance companies who write new property insurance policies
in the state under the strict requirements of the program.
Commissioner of Insurance Jim Donelon reports that the process has worked
so smoothly for the depopulation insurers that several of the companies have
indicated they may want to participate in a second wave of depopulation toward
the end of this hurricane season. Approximately 144,000 property insurance
policies remain in Citizens.
how the depopulation process has worked:
• The depopulation companies worked with insurance agents (producers) in
March and April 2008 to pick which individual policies they wanted to remove
• The depopulation insurers gave their lists of selected policies back
to Citizens by May 1.
and the depopulation insurers formally notified producers and policyholders
by June 1 which policies had been selected for
• Citizens policyholders selected for take out by a depopulation insurer
are given the option of moving to the new insurer upon renewal or staying with
Total number of policies selected for removed from Citizens by company:
Parishes with the largest number of policies selected for take out from Citizens:
says the Incentive Program is successful in not only removing policies
from Citizens but also in increasing the number
policies being written in the voluntary market. “These four Incentive
Program companies are either now writing or will soon begin writing new insurance
policies statewide. That’s good news for consumers because we need
increased competition in our property insurance market. More choices lead
to better prices.”
Additionally, Commissioner Donelon pointed out that legislation is making
its way through the process to authorize a third round of grant money for the
Insure Louisiana Incentive Program. He has been approached by several companies
interested in participating in the program should that come to pass.
Also making its way through the process is a bill to double the limits of
the Louisiana Insurance Guaranty Association (LIGA), which provides a safety
net of protection for policyholders whose companies become insolvent. This
is important because these companies are not household names though they have
met the substantial solvency requirements spelled out in the Incentive Program.
But policyholders will have the additional protection of these new, much higher
levels of security offered by LIGA.