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Louisiana Bill Would Shrink, Sell Off State's Insurer of Last Resort

While the state of Florida is expanding its state-owned property insurer, a bill has been introduced in the Louisiana legislature to sell off that state's...
May 8, 2007

While the state of Florida is expanding its state-owned property insurer, a bill has been introduced in the Louisiana legislature to sell off that state's insurer of last resort. A Louisiana State Senate committee has approved a bill to put Citizens Property Insurance Corporation up for sale.

The Senate Insurance Committee recently approved a bill by its chairman, Sen. James David Cain, that aims to reduce the number of policyholders in Louisiana Citizens Property Insurance Corp., which is financially backed by the state and insures homeowners and businesses who can't find insurance on the private market. "The time is now," said Cain. "It's a proven fact that business can run it better than the state."

What It Means to Agents:  Two Gulf Coast states hardest hit by hurricanes in recent years - Florida and Louisiana - are taking exactly opposite approaches in their efforts to make insurance more available and affordable.

While Louisiana is betting on the free market, Florida is betting that it can expand into the insurance business by putting the state's finances at risk in an attempt to keep rates low. Louisiana's legislature will soon consider a package of incentives proposed by Gov. Kathleen Blanco (D) designed to encourage more carriers to enter the state, while Florida Gov. Charlie Crist (R) is saying to carriers "go ahead" and leave. One approach is bound to fail. We think that Florida's carries a high risk of failure.
 
La. Measures Would Shrink Citizens, Change Building Codes (Insurance Journal 5/3/07)

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