Louisiana draws nine insurers to P&C market on subsidy offer
The US Gulf Coast state of Louisiana drew in more insurers to the state in its recently approved incentive programme than it had anticipated and will go back to legislators for more funds to expand the programme.
Nine insurers stepped forward with plans to collectively take over $62 million in supportive grants to write business. That sum ran some $17 million over the state's initial $45 million funding allocation.
“The application period was more than successful,” state insurance commissioner Jim Donelon (pictured) told a briefing for the press.
The Louisiana legislature will be asked to top up the programme funding and consider further proposals to reform the state's insurance market and homeowner building codes.
All nine arrivals, seven from out of state and two from Louisiana, could participate in the programme even on current terms.
“If all nine meet the qualifications for the programme, we would like to see all nine participate,” the chief of staff of the insurance regulatory office Denise Gardner said.
Until such additional funding is secured, the eventual qualifying firms would participate on a pro-rate basis.
Some 38,000 homes could get new coverage in the programme, Gardner said of initial back-of-the-envelope calculations. With the top-up in funding, the tally could rise to 55,000.
The incentive programme offers grants to incentivize new and existing insurance companies to write residential and commercial policies with a lean towards coastal areas. Policies also count that help depopulate the state insurer of last resort Citizens or mop up policies abandoned after the ongoing liquidation of UPC.
THe nine applicants and their requested grant levels include: Allied Trust Insurance Company - $6.5 million, Applied Underwriters - $10 million, Cajun Underwriters Reciprocal Exchange (CURE) - $5 million, Constitution Insurance Company - $10 million, Elevate Reciprocal Exchange - $5 million, Gulf States Insurance Company - $3.6 million, SafePoint Insurance Company - $10 million, SafePort Insurance Company - $2 million, and SureChoice Underwriters Reciprocal Exchange (SURE) - $10 million.
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