Lawmakers have raised questions about the insurance plan

A lot Louisiana Lawmakers say they are not ready to fund a homeowner’s insurance incentive program backed by the Insurance Commissioner. Jim Doneloneven if the Gov. John Bel Edwards call them to a special meeting in early February.

“I think the House is suspicious of everything,” House Speaker Pro Tempore Tanner MageeR-Houma, said in an interview on Wednesday. “There is absolutely no sales in the (Commissioner of Insurance Jim Donelon) is suggested as a solution.”

As recently as last week, Senate President Page CortezR-Lafayetteand the Edwards administration said lawmakers will likely meet in a special session in February to put it $45 million in a stimulus fund for insurance companies that Donelon says is a solution to the state’s insurance problems.

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 that,” he said House Democratic Caucus Chairman Sam Jenkins zero Shreveport.

The state has seen many insurance companies go under or pull out Louisiana after falling during the 2020 and 2021 hurricane seasons. The market crash is putting many homeowners’ laws on state insurance last. , Louisiana Citizens Property Insurance Corp.and rising housing prices.

In joint villages Louisiana’s coast, can approach or exceed the cost of home mortgages, representing 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 it $45 million to finance his opinion, and many politicians are raising questions.

“Do we need help with insurance? Absolutely,” Speaker Clay SchexnayderR-Living France, said. “But is this the real plan?”

Magee and a small group do not believe in the initial stimulus of Katrina and Rita, as Donelon has repeatedly said, and they question whether the same plan should be used again.

Although many insurance companies began writing policies after Katrina and Rita, this may have been due to Louisiana went many years without a major storm, not necessarily because of the incentives offered, they said.

‘We want good insurance companies’

Some of the smaller companies in the Katrina and Rita insurance program also expanded 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 internal community. Terrebonne Parish 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. said. Bret AllainR-Franklinyes and said he would rather see the state left $45 million in making Louisiana Citizens a better, long-term choice.

“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 Citizens instead.

Magee also said that it may be better to spend money on a program that allows people in parishes affected by storms to renovate their houses with more features to protect against storms, making them it is more attractive to private companies.

‘Not on my watch’

Lawmakers have also expressed interest in using Donelon’s stimulus money to attract companies that are still working in it. Louisiana to write more policies in higher risk areas. They are not very interested in attracting new companies, which have not been tested in the market with public funds.

In an interview Wednesday, Donelon said the money could, and likely would, be spent on companies that are already operating. Louisiana. There is one company in it Louisiana he has even been talked to about getting public support 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.

“None of those players participate in this incentive program funded by the state,” he said.

Cause of accident

The insurance market is down Louisiana it’s not just the result of back-to-back hurricanes in 2020 and 2021, Donelon argued. Some companies went under because they also worked inside Florida which, in Donelon’s opinion, state regulations were too loose.

But part of the politicians’ wariness about Donelon’s program is that they don’t know which companies might benefit from it. $45 million he is asking. According to Donelon, nine companies are interested in the financial aspect, but he did not reveal the names of these companies to the politicians.

Cortez and Schexnayder said Thursday they want to know what specific companies are considering Donelon’s program.

Without that information, Schexnayder said put $45 million in the forced collection would be the same as agreeing to buy a car without knowing anything about its make or model.

House Conservative Caucus Chairman Jack McFarlandR-Jonesborosaid that he not only wants to know who these companies are, but he also wants an opportunity to question them.

“I want to ask about the wages they will offer,” he said.

Not all politicians are skeptical of Donelon’s plan. Cortez said he likely 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

The Gov. said John Bel Edwards he also expressed no 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 isn’t just asking politicians to give $45 million – wants them to agree to release 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. According to him, there is a “difference of opinion that is emerging” 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 Joint Legislative Committee on the Budget Friday.

The Louisiana Illuminator is an independent, not-for-profit, nonprofit media organization driven by its mission to illuminate the way decision-making is done internally. Baton Rouge and how it affects the lives of Louisianans every day.