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Reports on Louisiana politics, government and the people shaping state policy

Louisiana lawmakers advance insurance incentives to House floor, but they still have reservations

The Louisiana State House in Baton Rouge
Kezia Setyawan
The Louisiana State House in Baton Rouge

After three hours of debate Tuesday, Louisiana lawmakers advanced legislation to devote $45 million to the Insure Louisiana Incentive Program, the bill that serves as the centerpiece for the legislature’s one-week special session to address the state’s property insurance crisis.

HB1 by Rep. Jerome Zeringue (R-Houma) cleared the House Appropriations committee without objection. The full House is expected to take up the measure Wednesday, holding a key vote that could ultimately determine the success or failure of the session, which must end no later than 6 p.m. Sunday.
Insurance Commissioner Jim Donelon said the property insurance crisis brought on by the devastating 2020 and 2021 hurricane seasons and the subsequent collapse of nearly a dozen insurers in the state is the worst since he assumed the role as the state’s top insurance regulator in 2006.

“I truly believe that if we don’t do this, thousands of homeowners will lose their homes,” Donelon said.

The program would give grants between $2 million and $10 million to qualifying companies that pledge to write insurance policies in parishes that have been deemed “high-risk.”

The main objective is to attract insurers who will take policyholders out of the Louisiana Citizens Property Insurance Corporation, the state-run insurer of last resort. Over the last two years, as more insurance companies collapsed or stopped doing business in the state, Citizens’ customer rolls have swelled to more than 125,000. Many of those customers are experiencing steep, legally-mandated rate hikes.

But some lawmakers are skeptical of Donelon’s approach and bristle at doling out cash bonuses to the insurance industry when so many of their constituents have been mistreated by their insurance providers in the aftermath of Hurricanes Laura, Delta, Zeta and Ida.

Members of the House Conservative Caucus have suggested that the money would be better spent on consumer credits to pay rising premiums or to fortify coastal homes against storm damage to secure residents lower rates.

But Donelon said the incentives are the best way to bring new insurers to the state and provide homeowners with some relief given the strict limitations placed on lawmakers for the special session.

“This is not a silver bullet, but I do believe it will be more than a Band-Aid,” Donelon said. “I would call it a tourniquet — it’ll stop the bleeding until… we can get to the regular session this spring.”

Rep. Tanner Magee (R-Houma) said with the narrow scope of the current special session and the limitations of the regularly scheduled fiscal session that begins April 10, broader reforms would be unlikely. During a fiscal session, lawmakers can file only five bills outside of tax and spending proposals.

“We’ve already committed most of our bills already, so this notion that we’re going to actually come in the general (session) and really fix this is a fiction we’re telling our constituents back home because I doubt it’s really going to happen,” Magee said. “We’re going to be back here in a year or two facing these same issues again.”

Paul Braun was WRKF's Capitol Access reporter, from 2019 through 2023.