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 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.