The Louisiana program to provide $100 million in grant money to insurers that provide protection for homeowners along the state's hurricane-exposed coast, has already sparked some interest, an official said today.

"We've had several companies contact us to inquire about the program and a handful are serious potential candidates," said Denise Brignac, deputy commissioner for the Insurance Department's office of financial solvency.

Yesterday Insurance Commissioner Jim Donelon kicked off the program by issuing a public invitation requesting applications for the Insure Louisiana Incentive Program.

"The program is an effort to attract more property and casualty providers to our state and to increase the private market capacity by 15 percent" Mr. Donelon said in a statement.

As announced:

o The program will provide matching funds to qualified property insurance companies from a $100 million state fund.

o During the initial application phase, individual grants allocated must be no less than $2 million nor in excess of $10 million.

o The commissioner must allocate 20 percent of the total amount of funds available for grants to domestic insurers.

o A second invitation for grant applications will be issued by the commissioner in the event that all monies in the fund are not allocated as a result of the first invitation for grant applications.

o In the second invitation, the commissioner will not allocate individual grants less than $2 million or in excess of $10 million.

o Insurers that 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.

o At least 50 percent of the net written premium should be received from policyholders whose property is located in the 37 parishes included in the federal Gulf Opportunity Zone Act in Louisiana.

o Insurers must write 25 percent of the net written premium for policyholders whose property is insured by the state's insurers of last resort, Louisiana Citizens Property Insurance Corporation. And at least half of this 25 percent must be policyholders whose property is located in parishes included in the Gulf Opportunity Zone Act in Louisiana.

The deadline for grant applications is Nov. 1, 4:30 p.m. CST.

Commissioner Donelon announced 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.

The decision on grant awards will be made by Dec. 10, 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.

After grant application approval the department said it anticipates disbursing funds to the approved applicants by Jan. 1, 2008.

Ms. Brignac said companies that apply need an A.M. Best Co. "B-plus-plus" rating, capital and surplus of $25 million and that they may not receive a grant amounting to more than 20 percent of their capital and surplus.

The state's money must be segregated on the insurer's financial statements and each dollar of grant money must be matched with $2 in premium.

A $5 million grant would have to be matched with $5 million in surplus and two-to-one writings against that--or $20 million in premium, said Ms. Brignac.

Once insurers receive funds they have to write 50 percent of that amount in Gulf Opportunity Zone parishes and 25 percent has to be written through Citizens, she explained.

Insurers must remain in the program five years to earn the full grant amount and each year the insurance department will do a target exam to make sure the company has satisfied program requirements. If they have, 20 percent of the grant is released into company surplus.

"Any time you don't meet requirements you can be deemed in default and you have to repay any unearned portion of the grant," Ms. Brignac said.

More program details are online at www.ldi.state.la.us.

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