The Louisiana Legislature has adopted legislation to lure more insurance companies to hurricane-prone areas by offering financial incentives.

In the final minutes of the 2007 session, lawmakers passed, as part of a package of bills, a compromise version of a $100 million grant program to attract insurers to the state.

The package of bills, endorsed by Gov. Kathleen Blanco and Insurance Commissioner Jim Donelon, addresses the availability and affordability of private insurance following the 2005 hurricane season.

Tami Stanton, central regional state affairs manager for the National Association of Mutual Insurance Companies (NAMIC) said the legislation "may make all the difference in the future development of Louisiana's insurance market."

Included in the package of bills passed is HB 678, which will provide grants of up to $10 million to each insurance company that agrees to write new homeowners' and commercial policies along the Louisiana coast.

By attracting more private insurers, Gov. Blanco believes competition will force rates down for policyholders, Ms. Stanton said.

The purpose of the overall $100 million matching fund is to encourage insurers to do business in Louisiana and requires at least 25 percent of any new policies written to be for customers currently in the state-run Louisiana Citizens Property Insurance Corporation, the state's insurer of last resort.

As amended in the Senate, the bill also offers homeowners $105 million in future tax credits to offset the cost of their insurance.

The Legislature also approved HB 960, another piece of the Blanco/Donelon package that terminates the Louisiana Insurance Rating Commission.

"Eliminating the last remaining rating commission in the country also sends a positive message to insurers," Ms. Stanton said.

A third piece of the Blanco/Donelon package approved by the Legislature is SB 205, that would create a consumer advocacy office within the insurance department by Oct. 1.

Special Reports /

La. Adopts Carrier Incentives

Related Stories

Recommended For You