As Louisianans across the state grapple with surging property insurance premiums amid an ongoing industry crisis, state lawmakers convened a special session Monday in the hope of luring new insurers to the state with cash incentives.
The session comes at the behest of state Insurance Commissioner Jim Donelon, who said the incentives were the best way to lower rates in storm-threatened areas and to get policyholders off of the swollen rolls of the state-run insurer of last resort.
In the aftermath of the devastating 2020 and 2021 hurricane seasons, nearly a dozen Louisiana insurance companies collapsed or stopped writing policies in the state.
Donelon is asking lawmakers to appropriate $45 million to the Insure Louisiana Incentive Program, which would offer grants between $2 million and $10 million dollars to new insurers who will begin writing policies in vulnerable parts of the state.
Debates this session will center around HB1 by Rep. Jerome Zeringue (R-Houma), chairman of the House Appropriations Committee, which would direct $45 million to the Insure Louisiana Incentive Program.
Zeringue said the odds of the legislation passing were “50-50” in an interview shortly after the House and Senate adjourned Monday.
“I’ve talked to a lot of members who have issues and concerns,” Zeringue said. “We’ve done some things to incorporate in the bill some safeguards …so that we’ll have an idea how the program is actually working.”
But Zeringue expressed frustration at the limited scope of the special session. Lawmakers are only allowed to consider legislation that directly addresses the funding of the incentive program, and are barred from passing legislation that may address other factors contributing to the crisis.
Members of the state’s House Conservative Caucus said some members may be hesitant to vote for the stop-gap appropriation without a promise of broader insurance reforms.
Zeringue said he would join those members in calling for more comprehensive legislation during the regular session that begins April 10, but reiterated his support for the task at hand.
“My region — Terrebonne — took it on the chin through Ida,” Zeringue said. “We have people who can’t afford insurance, some who are going without, some who can’t rebuild their homes. So, I think anything we can do to provide an opportunity for some relief is important.”
The House Appropriations Committee will open debate on the stop-gap measure Tuesday at 9:30 a.m.
Senate President Page Cortez (R-Lafayette) said he hopes the legislature will conclude the session on Friday, but lawmakers have until 6 p.m. Sunday to finalize the legislation.
Here’s a primer on Louisiana’s ongoing property insurance crisis:
Take a look at these previews of this week’s special session from WWNO/WRKF and from reporters at the Louisiana Illuminator.
Donelon convinced lawmakers to create the new incentive program last spring but failed to secure the funding needed to pay the incentives.
As more insurers failed in August and September of last year, and the rolls of the state-run insurer of last resort swelled, Donelon began to publicly urge lawmakers to convene a special session to appropriate the necessary funds.
But those early requests got a chilly reception from lawmakers and Gov. John Bel Edwards.
“I believe insurance companies have not acquitted themselves very well,” Edwards said in October on his monthly radio show. “Many of the things they would want us to do to make our market more attractive fly in the face of their performance so far.”
But the governor and legislative leaders have warmed to the idea in the months since, and after lengthy negotiations with Donelon and legislative leaders, Edwards officially called the legislature into the special session.
