Louisiana House Bill HB952

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 4/7/10
• Engrossed: 4/22/10
• Report Pass: 5/26/10
• Enrolled: 6/9/10
• Chaptered: 6/21/10
• Passed: 6/21/10

Caption

Provides relative to the policy take-out program for the La. Citizens Property Insurance Corporation

Impact

The legislation is expected to have a substantial impact on state insurance regulations. It allows for a more organized take-out process whereby insurers can formally express their intentions to assume policies from the LCPIC, fostering a competitive environment among private insurers. This could lead to lower premiums for homeowners as they can benefit from a broader range of coverage options. Additionally, the bill aims to ensure that a significant percentage of policies, particularly those insuring single-family residences, are included in this take-out initiative, which could improve the overall risk profile of the LCPIC.

Summary

House Bill 952 aims to amend the Louisiana Citizens Property Insurance Corporation's (LCPIC) policy take-out program. The act proposes changes to how insurance policies are managed, specifically focusing on facilitating the transfer of certain policies from the LCPIC to private insurers. With this bill, the LCPIC is required to annually offer all of its in-force policies for removal to the voluntary market. The proposal bundles policies into groups to create a market for their depopulation, intended to stabilize the insurance market within the state and reduce the financial burden on the LCPIC, which often underwrites high-risk properties.

Sentiment

Overall sentiment regarding HB 952 appears to be cautiously optimistic among insurance stakeholders and homeowners affected by high insurance rates. Proponents argue that creating a more accessible path for policy removal from the LCPIC will enhance the viability of private insurance markets and ultimately benefit consumers. However, some industry experts express concerns that not all insurers may have the necessary capacity to take on these policies, which could hinder the effectiveness of the bill.

Contention

Notable points of contention surrounding the bill include debates on the ability of private insurers to adequately handle the risk associated with the policies being transferred. Additionally, there are concerns regarding how the changes might affect the coverage options available to low-income homeowners or those in high-risk areas. Critics of the bill argue that it does not sufficiently address the potential risks to homeowners if insurers are unable to manage the policies effectively, which could lead to increased vulnerability in case of disasters.