Louisiana Legislature Considers $45 Million Insurance Incentive Fund

The Louisiana Legislature is considering a bill that would establish a $45 million incentive fund aimed at attracting additional private property insurers to the state.  ABC 31 News’ Joel Massey spoke with the House Insurance Chairman about the proposal.

State Representative and House Insurance Chairman Michael Huval said, “The program is to incentivize insurance companies to write property insurance in our state and it’s because of the storms that we’ve had in the past that has caused many insurance companies to either stop writing in these areas or they’ve pulled out of the state, or they’ve just went out of business.”

Huval is supporting a bill that would provide a $45 million incentive fund to attract more private property insurers to the state.

“This worked very well after hurricanes Katrina and Rita.  I was an insurance agent then and even though I wasn’t in the direct line of the storms I was affected as an agent because a lot of the insurance carriers that I represented either stopped writing in this area or just stopped writing completely because of the major storms that we had.”

If the bill passes it would allow insurance agencies to apply for a grant from the 45-million-dollar fund which the company would then have to match.  Huval says the incentive fund can result in more homeowners receiving insurance from a private insurer instead of the much more expensive Louisiana Citizens Property Insurance policies.

“By law Citizens has to be ten percent higher than the market.  Now because of the cost of reinsurance that they have to purchase to protect themselves they’ve had to go up even higher than that.”

Huval is supporting the bill because he says it has worked before for Louisiana.

“This is proven to have worked after two major storms that we’ve had after Katrina and Rita, and in my opinion this will work again it will help incentivize insurance carriers to write in the area.  It will also bring additional carriers to our state.”

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