HLS 231ES-1 REENGROSSED
2023 First Extraordinary Session
HOUSE BILL NO. 1
BY REPRESENTATIVE ZERINGUE
APPROPRIATIONS/GENERAL: Appropriates funding for the Insure Louisiana Incentive
Program
1 AN ACT
2To appropriate funds for Fiscal Year 2022-2023, relative to the Insure Louisiana Incentive
3 Program; to impose conditions on the use of such appropriation; to require reports
4 relative to the use of such appropriation; to direct the state treasurer to transfer
5 certain sums into the program fund for the execution of the appropriation; to provide
6 for an effective date; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. The following sum is hereby appropriated from the source specified for the
9purpose of making a supplemental appropriation for Fiscal Year 2022-2023 to the
10Department of Insurance.
11 ELECTED OFFICIALS
12 DEPARTMENT OF INSURANCE
04-165 COMMISSIONER OF INSURANCE 13
14EXPENDITURES:
15Administrative/Fiscal Program for the Insure
16Louisiana Incentive Program $45,000,000
17 TOTAL EXPENDITURES $45,000,000
18MEANS OF FINANCE:
19State General Fund by:
20 Statutory Dedications:
21 Insure Louisiana Incentive Fund $45,000,000
22 TOTAL MEANS OF FINANCING $45,000,000
23Provided, however, that funds appropriated herein to the Administrative/Fiscal Program for
24the Insure Louisiana Incentive Program, shall be used to award grants only to insurers
25licensed in Louisiana possessing a minimum financial strength rating of AM Best "B+" or
26a Demotech financial stability rating of "A". Any licensed surplus lines insurer applying for
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HB NO. 1
1a grant pursuant to the Insure Louisiana Incentive Program shall have a minimum financial
2strength rating of AM Best "A".
3Provided further that the commissioner shall expedite to the greatest extent possible the
4approval of certificates of authority, rate filings, form filings, and other necessary regulatory
5approvals of qualified insurers to facilitate the underwriting of new policies pursuant to the
6program as quickly as possible and shall monitor the financial solvency of insurers that are
7issued a grant pursuant to the program from funds appropriated herein. Such monitoring
8shall include an evaluation of the adequacy of insurer reinsurance programs using
9catastrophe model stress tests against the insurer's book of business. The commissioner shall
10take whatever action is necessary to ensure that insurers receiving grants pursuant to the
11program from funds appropriated herein remain financially solvent.
12Provided further that the commissioner shall submit annual and quarterly reports on the
13Insure Louisiana Incentive Program to the House Committee on Appropriations, the Senate
14Committee on Finance, and the House and Senate committees on insurance containing
15information for the preceding year and quarter, respectively, detailing the following for
16grantees receiving grants from funds appropriated herein: the amount of premiums written,
17by parish and by grantee, pursuant to the program; the amount of premiums, by parish and
18by grantee, for property located in the parishes included in the federal Gulf Opportunity
19Zone Act of 2005; the amount of premiums, by parish and by grantee, removed from the
20Louisiana Citizens Property Insurance Corporation; and the total amount of premiums for
21each grantee, by parish, inclusive of premiums written pursuant to the program.
22Provided further that the commissioner of insurance may adopt emergency rules pursuant
23to the Administrative Procedure Act to implement the Insure Louisiana Incentive Program
24in conformity with the provisions of this Act.
25Provided further that the commissioner shall promulgate rules for the program that require
26reporting at least quarterly by each grantee that receives a grant from the funding
27appropriated herein regarding the grantee's: premium to surplus ratio, net of reinsurance;
28gross premium to surplus ratio; and detail on the catastrophe reinsurance program
29maintained by the grantee, including retentions, limits, reinstatements, the current rating of
30the grantee, and Probable Maximum Loss models for at least five different scenarios. Such
31rules shall establish ratios for these reporting requirements, as applicable. Within thirty days
32of the end of each reporting period, the department shall aggregate all responses and submit
33them as a report to the Legislature. The commissioner of insurance is authorized to adopt
34emergency rules for the implementation of this provision.
35Provided further that in order to continue to qualify for any funding appropriated herein for
36the Insure Louisiana Incentive Program, for each earning period the grantee shall have
37written at least twenty-five percent of its net written premium during the earning period for
38policyholders whose property was formerly insured by the Louisiana Citizens Property
39Insurance Corporation. The terms "earning period" and "net written premium" shall be
40defined by rule.
41Provided further, that in awarding grants from funds appropriated herein pursuant to the
42Insure Louisiana Incentive Program, the commissioner shall give preference to grant
43applicants that agree to provide wind and hail coverage.
44 Section 2. The state treasurer is hereby authorized and directed to transfer $45,000,000
45to the Insure Louisiana Incentive Fund from the state general fund out of FY 2022-2023
46excess state general fund monies recognized by the Revenue Estimating Conference at its
47December 15, 2022, meeting.
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1 Section 3. This Act shall become effective upon signature by the governor or, if not
2signed by the governor, upon expiration of the time for bills to become law without signature
3by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
4vetoed by the governor and subsequently approved by the legislature, this Act shall become
5effective on the day following such approval.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 1 Reengrossed 2023 First Extraordinary Session Zeringue
Abstract: Transfers $45 M from the State General Fund into the Insure La. Incentive Fund
and appropriates the funding, with certain conditions and reporting requirements, to the
Dept. of Insurance for implementation and execution of the Insure La. Incentive Program.
Proposed law directs the state treasurer to transfer $45 M from the state general fund into
the Insure La. Incentive Fund.
Proposed law appropriates $45 M of budget authority to the Dept. of Insurance out of the
Insure La. Incentive Fund for implementation and execution of the Insure La. Incentive
Program. Requires that funds be used to award grants only to insurers licensed in La.
possessing a minimum financial strength rating of AM Best "B+" or a Demotech financial
stability rating of "A". Further requires any licensed surplus lines insurer applying for a
grant pursuant to the program to have a minimum financial strength rating of AM Best "A".
Proposed law further requires the commissioner to expedite to the greatest extent possible
the approval of certificates of authority, rate filings, form filings, and other necessary
regulatory approvals of qualified insurers to facilitate the underwriting of new policies
pursuant to the program as quickly as possible and to monitor the financial solvency of
insurers that are issued a grant pursuant to the program from funds appropriated in proposed
law. Provides such monitoring shall include an evaluation of the adequacy of insurer
reinsurance programs using catastrophe model stress tests against the insurer's book of
business. Requires the commissioner to take whatever action is necessary to ensure that
insurers receiving grants pursuant to the program from funds appropriated in proposed law
remain financially solvent.
Proposed law additionally requires the Dept. of Insurance to submit annual and quarterly
reports on the program to the House Committee on Appropriations, the Senate Committee
on Finance, and the House and Senate committees on insurance detailing the following
information on grantees receiving grants from funds appropriated pursuant to proposed law:
the amount of premiums written by parish pursuant to the program; the amount of premiums
by parish for property located in the parishes included in the federal Gulf Opportunity Zone
Act of 2005; the amount of premiums by parish removed from the Louisiana Citizens
Property Insurance Corporation; and the total amount of premiums by parish, inclusive of
premiums written pursuant to the program.
Proposed law authorizes the commissioner of insurance to adopt emergency rules pursuant
to the Admin. Procedure Act to implement the Insure La. Incentive Program in conformity
with proposed law.
Proposed law requires the commissioner to promulgate rules for the Insure La. Incentive
Program that require reporting at least quarterly by each grantee that receives a grant from
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funds appropriated in proposed law regarding certain financial data, including the grantee's
premium to surplus ratio and the grantee's catastrophe reinsurance program. Authorizes the
commissioner to adopt emergency rules to implement this requirement.
Proposed law conditions continued receipt of grant funding by a grantee receiving a grant
from funds appropriated in proposed law on the grantee writing at least 25% of its net
written premiums during each earning period for policyholders whose property was formerly
insured by La. Citizens Property Insurance Corp. Requires the terms "earning period" and
"net written premium" be defined by rule.
Proposed law requires that in awarding grants from funds appropriated pursuant to proposed
law, the commissioner give preference to grant applicants that agree to provide wind and hail
coverage.
Effective upon signature of the governor or lapse of time for gubernatorial action.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Appropriations to the
original bill:
1. Delete requirement that at least 50% of appropriated funds be used to award
grants to companies with a minimum financial strength rating of AM Best "B+".
2. Require nonadmitted insurers applying for a grant pursuant to present law to
have a minimum financial strength rating of AM Best "A".
The House Floor Amendments to the engrossed bill:
1. Change terminology from "nonadmitted insurer" to "licensed surplus lines
insurer" with respect to increased financial strength rating requirement for such
insurers.
2. Add authorization for the commissioner of insurance to adopt emergency rules
pursuant to the Administrative Procedure Act to implement the Insure La.
Incentive Program in conformity with proposed law.
3. Require quarterly reporting of certain financial data by each grantee that receives
a grant pursuant to proposed law. Authorize the commissioner to adopt
emergency rules for the implementation of the reporting requirement.
4. Require each grantee to write a certain amount of net written premiums each
earning period for policyholders whose property was formerly insured by the La.
Citizens Property Insurance Corporation in order for the grantee to remain
eligible.
5. Require the commissioner to give preference in awarding grants from funding
appropriated in proposed law to applicants that agree to provide wind and hail
coverage.
6. Make conforming changes to the title of the bill.
7. Make technical changes.
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