NU Online News Service, Aug. 27, 3:48 p.m.EDT

Legislative and regulatory restraint, strong statewide buildingcodes, and incentive programs to entice new insurers to Louisianahave each contributed to the state's recovery since HurricaneKatrina, said speakers at a recent conference.

The storm–the most destructive natural disaster in the UnitedStates, which caused more than $41 billion in insured losses whenit occurred–happened five years ago. Katrina struck New Orleans onAug. 29, 2005.

At the Five-Year Katrina and Rita Insurance Summit in Louisiana,State Insurance Commissioner Jim Donelon said about 930,000 claimswere filed as a result of the storms. Losses paid to date are about$29 billion–about $25.5 from Katrina.

Yet five years after Katrina, Mr. Donelon said the insurancemarket in Louisiana is "stronger, more efficient and fairer."Louisiana adopted the first ever statewide building code followingthe storm, he said.

Commissioner Donelon said Louisiana is "still trying to attract"new companies to the state, but he declared an incentive program,which provided matching grants to insurers who chose to write inLouisiana, a success. Five companies took advantage of the program,receiving $29 million in grants, he said.

Kevin Cunningham, Louisiana counsel for the American InsuranceAssociation, said that following Katrina, there was a "great bit oflegislation that would have done some bad things to our [commercialinsurance] industry," but lawmakers "exercised some restraint" andthe result has been a vibrant market despite the fact that morethan half of the losses from Katrina were absorbed by businessinsurance.

Market share among primary homeowners insurers has increasedsince Katrina. Today, 92 percent of the market is held by admittedinsurers, 2 percent by surplus insurers and 6 percent by CitizensProperty Insurance Corp., the insurer of last-resort.

The policy count at Citizens, once ballooned to about 170,000,is now at 132,000 thanks to a depopulation program, reportedCitizens' chief executive John Wortman, who is retiring soon.

The state-run insurer handled 80,000 claims from Katrina andHurricane Rita and incurred losses of $1.5 billion, Mr. Wortmansaid. About 77,500 of the claims are closed.

Currently Citizens is the third-largest property insurer inLouisiana.

"Over the next several months we hope to be the fourth-largest,"Mr. Wortman said. Another depopulation round is scheduled for Dec.1, he said.

The summit included an update from Mike Park, director of theLouisiana Recovery Field Office for the Army Corps of Engineers, onthe vast levee system being constructed.

The Army Corps has spent $8 billion on the entire system since2005, and $5 billion to $6 billion more is under contract to finishthe system of levees, flood walls, pump stations and gates toprotect Louisiana against a 1-in-100-year event by 2011, said Mr.Park.

Also in 2011, modeler Risk Management Solutions (RMS) said it isreleasing a new hurricane model to incorporate the levee system inNew Orleans.

The flood threat to the city continues to increase since thecity is actually sinking because of its location, RMS said. Thethreat is compounded by the risk in global sea levels as a resultof climate change and the increased level of hurricane activity inthe Atlantic, RMS said.