SLS 12RS-1800 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2012
SENATE BILL NO. 732
BY SENATOR CHABERT
INSURERS. Provides relative to Citizens Insurance. (gov sig)
AN ACT1
To amend and reenact R.S. 22:2291, relative to the Louisiana Citizens Property Insurance2
Corporation; to provide for declarations, purpose, and construction; to provide for3
affordable rates; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 22:2291 is hereby amended and reenacted to read as follows: 6
ยง2291. Louisiana Citizens Property Insurance Corporation; declaration and purpose;7
construction8
It is hereby declared by the Legislature of Louisiana that an adequate and9
affordable market for fire with extended coverage and vandalism and malicious10
mischief insurance and homeowners coverage is necessary to the economic welfare11
of the state, including the coastal areas of the state, and that without such affordable12
insurance the orderly growth and development of the state would be severely13
impeded; and that adequate and affordable insurance upon property is necessary to14
enable owners of homes and commercial owners to obtain financing for the purchase15
and improvement of their property. It is further declared that the state has an16
obligation to provide an equitable method whereby every licensed insurer writing17 SB NO. 732
SLS 12RS-1800 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
fire, extended coverage and vandalism and malicious mischief and, if necessary,1
homeowners coverage on a direct basis in Louisiana is required to meet its public2
responsibility instead of shifting the burden to a few willing and public-spirited3
insurers. While deserving praise, the financing mechanisms of the former plans were4
insufficient to meet the needs of this area. It is the purpose of this Chapter to accept5
this obligation and to provide a mandatory program to assure an adequate and6
affordable market for fire, extended coverage and vandalism and malicious mischief7
and, if necessary, homeowners insurance in the coastal and other areas of Louisiana.8
The legislature intends by this Chapter that property insurance be provided and that9
it continues, as long as necessary, through an entity organized to achieve efficiencies10
and economies, all toward the achievement of the foregoing public purposes.11
Therefore, the Louisiana Citizens Property Insurance Corporation, a nonprofit12
corporation, is hereinafter created, and said corporation shall operate insurance plans13
which shall function exclusively as residual market mechanisms to provide essential14
property insurance for residential and commercial property, solely for applicants who15
are in good faith entitled, but are unable, to procure insurance through the voluntary16
market. The legislature further intends that the corporation work toward the ultimate17
depopulation of these residual market insurance plans. Because it is essential for the18
corporation to have the maximum financial resources to pay claims following a19
catastrophic hurricane, it is the intent of the legislature that the income of the20
corporation be exempt from federal income taxation and that interest on the debt21
obligations issued by the corporation be exempt from federal income taxation.22
Section 2. This Act shall become effective upon signature by the governor or, if not23
signed by the governor, upon expiration of the time for bills to become law without signature24
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If25
vetoed by the governor and subsequently approved by the legislature, this Act shall become26
effective on the day following such approval.27 SB NO. 732
SLS 12RS-1800 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Alan Miller.
DIGEST
Present law establishes legislative declarations and establishes the Louisiana Citizens
Property Insurance Corporation (Citizens) as a mandatory program to assure an adequate
market for fire, extended coverage and vandalism and malicious mischief and, if necessary,
homeowners insurance in the coastal and other areas of La.
Proposed law retains present law, and furthers requires the Citizens assure an affordable
market for fire, extended coverage and vandalism and malicious mischief and, if necessary,
homeowners insurance in the coastal and other areas of La.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 22:2291)