The Louisiana Insurance Guaranty Association (LIGA) is assessing its member property & casualty insurance companies $100 million to cover larger than expected claims costs on older insolvencies, and expected new insolvencies resulting from Hurricane Ida. LIGA will assess 1 percent of direct net written premium for 2020 and will assess another 1 percent for 2021. The assessments have been voted on by the LIGA Board of Directors, and do not need the approval of the Louisiana Insurance Commissioner.

Assessments are based on prior year premiums written in the state on covered lines of business. Assessments are voted on by the board but are not always collected or called until its necessary to pay the covered claims. The Board can also partially call an assessment as the need arises. This ensures that the association has enough funding on hand to cover claims while deferring some of the voted assessments until the total liability of covered claims is known.

LIGA is handling the claims of prior insolvencies with significant asbestos liability and several insolvent workers compensation insurers whose claims experiences have necessitated additional assessments to cover the worse than anticipated claims experience in that line of business. Workers compensation claims are long-tailed claims that LIGA must pay out on for many years. LIGA covers all claims, including workers compensation claims, up to $500,000 per occurrence. Unearned premium claims are covered up to $10,000 and there is a statutory mandatory $100 deductible on all claims.