Louisiana said private insurers will remove more than 25,000policies from the state's homeowners insurer Citizens PropertyInsurance Corporation, a direct result of the state program toprovide grants to new insurers for taking these risks.

The state's Commissioner of Insurance Jim Donelon said theprogram has been so successful that several companies "indicatedthey may want to participate in a second wave of depopulationtoward the end of this hurricane season."

Four insurance companies have participated in the InsureLouisiana Incentive Program, and another has started the process ofremoving property insurance policies from the Citizens program.

The state's Department of Insurance said a total of 26,595policies have been selected to be removed from Citizens by ASILloyds, Imperial Fire & Casualty Insurance Company, OccidentalFire & Casualty Company, Southern Fidelity and AmericasUnderwriting Agency, which is not part of the state incentiveprogram.

The department said the depopulation of Citizens is a directresult of the Insure Louisiana Incentive Program, created by thestate legislature in 2007 to increase the availability of propertyinsurance in the state and decrease the business written throughCitizens.

The program provides matching grants of $2-to-$10 million toqualified insurance companies who write new property insurancepolicies in the state under the strict requirements of theprogram.

Currently, there are approximately 144,000 property insurancepolicies remaining in Citizens, the department said.

Under the incentive program, risks are selected by agents andthe companies, and all parties were formally notified by June 1 onwhich policies were selected for takeout. It will be the decisionof the policyholder to either remain with Citizens or move to thenew insurer.

Of the five insurers named, Southern Fidelity holds the largestnumber of policies with 16,010. Jefferson parish has the largestnumber of policies selected for takeout at 5,470. Orleans and St.Tammany are next with more than 3,600 policies. The remaining threeparishes are Iberia, Vermilion and St. Mary.

The program is also increasing the number of insurers availablein the state to write property insurance, said Mr. Donelon,pointing out that the insurers will soon be writing policiesstatewide.

The legislature is making grant money available for a thirdround of the incentive program, and the commissioner added that hehas been approached by several companies interested inparticipating in the program should the legislation pass.

The department said there is also a bill in the legislature thatwould double the limits of the Louisiana Insurance GuarantyAssociation. The program provides a safety net to protectpolicyholders whose companies become insolvent.

While the companies in the incentive program have met"substantial solvency requirements," they "are not householdnames," and the increased limits would give policyholdersadditional protection and a higher level of security offered by theGuaranty Association, the department said.