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Governor signs $45 million legislation providing incentives for insurance companies to operate in La.
UPDATE: Governor Edwards signed both bills from the special session into law, his office announced Tuesday.
Read the original story below.
BATON ROUGE - A special session was held Friday at the Capitol to address the state’s insurance crisis. The Louisiana Legislature passed a bill to provide incentives to homeowners insurance companies.
Louisiana Department of Insurance commissioner, Jim Donelon, urged Gov. Edwards to hold a special session that ended Friday. Lawmakers supported a bill with hopes of bringing new companies to the state.
Thousands of people were left without homeowners insurance after a series of storms caused insurance companies in the state to go bankrupt.
The lack of companies writing policies led to many being picked up by Louisiana Citizens. The state-funded insurance company is required to charge 10% above market prices.
“I mean, if I have to get a second job, then I have to do it, but I didn’t plan on being almost sixty working two jobs," resident Darlinda Cook said.
A $45 million bill providing incentives to insurance companies was passed quickly, and lawmakers are hoping it will get people off the Citizens policy.
“The more competition we have, the better. It will hopefully drive the prices down lower, but more importantly, we want our homeowners to have insurance in case of a catastrophe, and they can have coverage for their homes,” Senator Franklin Foil said.
Several companies are already interested in participating in the program. Donelon said he can’t guarantee lower prices but hopes the market will be stabilized.
“It’s not a silver bullet, it’s not a cure all, but we’re trying to give the market a shot in the arm. And we’re doing that, and the legislature has been doing that by appropriating the $45 million dollars to incentivize these small to mid-tier companies to come in and write policies,” said David Caldwell, Executive Council, Department of Insurance member.
The LDI expects this bill to allow 40,000 people to leave citizens for a different policy. Citizens currently has over 120,000 policies compared to 2021 when the company only had 41,000.
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