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

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

Four insurance companies have participated in the Insure Louisiana Incentive Program, and another has started the process of removing property insurance policies from the Citizens program.

The state's Department of Insurance said 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 Americas Underwriting Agency, which is not part of the state incentive program.

The department said the depopulation of Citizens is a direct result of the Insure Louisiana Incentive Program, created by the state legislature in 2007 to increase the availability of property insurance in the state and decrease the business written through Citizens.

The 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.

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

Under the incentive program, risks are selected by agents and the companies, and all parties were formally notified by June 1 on which policies were selected for takeout. It will be the decision of the policyholder to either remain with Citizens or move to the new insurer.

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

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

The legislature is making grant money available for a third round of the incentive program, and the commissioner added that he has been approached by several companies interested in participating in the program should the legislation pass.

The department said there is also a bill in the legislature that would double the limits of the Louisiana Insurance Guaranty Association. The program provides a safety net to protect policyholders whose companies become insolvent.

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

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