Some Louisiana lawmakers said they are not ready to fund a homeowners insurance reform program backed by Insurance Commissioner Jim Donelon, even if Gov. John Bel Edwards. call them to a special meeting in early February.
“I think the House is skeptical of everything,” House Speaker Pro Tempore Tanner Magee, R-Houma, said in an interview Wednesday. “There is absolutely no selling on what (Insurance Commissioner Jim Donelon) is proposing as a solution.”
Recently like last weekSenate President Page Cortez, R-Lafayette, and the Edwards administration said it is likely that lawmakers will be called into a special session in February to put $45 million into a stimulus fund for insurance companies. by Donelon. a solution to the state’s insurance deficit.
But in interviews Wednesday and Thursday, many lawmakers said they were not ready to commit the money to a special meeting in February — or when the Legislature convenes for its regular meeting in April. They don’t believe that Donelon’s aggressive program will reduce the state’s insurance problems.
“I need more information before I sign off on that,” said House Democratic Caucus Chairman Sam Jenkins of Shreveport.
The state has seen many insurance companies go under or pull out of Louisiana after the hurricane season of 2020 and 2021. The collapse of the market has left many homeowners’ laws on the state’s insurance company, Louisiana Citizens Property Insurance Corp., and raised home prices. home mortgages, say politicians who represent these groups.
To solve this problem, Donelon wants to implement an incentive program like the one he designed after hurricanes Katrina and Rita in 2005. Insurance companies are willing to write policies for better homes. the risk that they will receive government grants to help cover their costs. The goal is to divert policies away from Louisiana Citizens, who are required by law to pay more for their insurance than in the private market.
‘Is this the right plan?’
Lawmakers first signed off on this request from Donelon during their 2022 legislative session, but they didn’t put any money behind it. Now the insurance commissioner wants $45 million to fund his idea, and lawmakers are raising questions. “Need help with insurance? Absolutely,” said House Speaker Clay Schexnayder, R-French Settlement. “But is this the right plan?” Magee and a few others don’t believe the initial Katrina and Rita stimulus was successful, as Donelon has repeatedly said, and they question whether the same plan should be used again. Companies began writing policies after Katrina and Rita, perhaps because Louisiana had gone years without a major hurricane, not because incentives were offered, they said. from it.
‘We want good insurance companies’
Some of the smaller companies in the Katrina and Rita insurance program were also created after Hurricane Ida, according to the Times-Picayune.
“I think Commissioner Donelon thinks that people down here are complaining about as many insurance companies as we were before and they’re not,” said Magee, who represents communities in Terrebonne Parish were affected by Hurricane Ida. “We want good insurance companies that will actually be partners here and pay claims and do everything they’re supposed to do.”
According to Magee, the money may have an immediate impact if it is used directly to reduce the costs of Louisiana Citizens, where people must get insurance if they cannot get it on the private market. Sen. Bret Allain, R-Franklin, agreed and said he wants to see the state put $45 million into making Louisiana Citizens a better, long-term option.
“Half of these companies we couldn’t bring in and support,” Allain said. “I don’t know why we don’t use the money to support the Citizens.” We can have a sustainable product of the latter.” Magee also said that more money should be spent on a program that allows people in hurricane-affected churches to renovate their homes with features that are more storm-proof, making them better. then attract private companies. .
‘Not on my watch’
Legislators have also expressed interest in using Donelon’s stimulus money to encourage companies still operating in Louisiana to write more policies in more risky areas. They are not very interested in attracting new, untested companies in the market with government funds. One company in Louisiana has even approached him about getting public assistance again for policies that have already been written. Donelon said he will also make sure that people who led insurance companies that failed in the past are not involved in companies that have opportunities in the future. he said.
Cause of accident
The collapse of the insurance market in Louisiana is not the only result of the big storms back in 2020 and 2021, argued Donelon. Some of the companies that went down because they are also working in Florida which in the opinion of Donelon, the laws of the state are too open. Donelon said there were nine companies interested in the financing, but he did not share the names of those companies with lawmakers. Cortez and Schexnayder said Thursday they want to know which specific companies are considering Donelon’s program. Without that information, Schexnayder said. putting $45 million into a leveraged fund is like agreeing to buy a car without knowing anything about its make or for example.
House Conservative Caucus chairman Jack McFarland, R-Jonesboro, said he not only wants to know who these companies are, but also wants an opportunity to question them. .
Not all politicians are skeptical of Donelon’s plan. Cortez said he would support the enforcement program, even if it’s just a “Band-Aid” to temporarily eliminate some homeowners’ insurance coverage.
What is the opinion of the governor
Governor John Bel Edwards did not express any doubt about Donelon’s request on the governor’s radio station on Wednesday. Edwards said he believes he and councilors are on the same page about supporting Donelon’s idea, although there is disagreement over whether a special meeting should be held.
Donelon is not only asking lawmakers to provide the $45 million, but he wants them to agree to provide the money sometime next month during a special session of the Legislature. .
The insurance commissioner said he needs the money quickly, before the Legislature convenes in April, so that companies that buy reinsurance — insurance for insurance companies — know what’s available to them this year. spring.
Donelon also said that the longer the state waits to establish the stimulus fund, the more families will face large increases. Louisiana Citizens fees increased 63% this year. Each month, more families will see those new price increases applied, he said.
But, it seems that Edwards will be asked to call the special session and it does not seem certain on Wednesday that it will be successful. He said that there is a “difference of opinion” among the politicians on whether a special meeting should be convened.
Donelon will have at least one more opportunity to convince lawmakers of the need for his program and the special meeting. He was scheduled to speak before the Legislature’s Joint Committee on the Budget on Friday.
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