Louisiana Legislature approves $45 million in incentives for insurers in Special Session
Lawmakers ended a special session last Friday after they approved $45 million to attract home insurers back to Louisiana.
House Bill 1 passed overwhelmingly in both chambers.
The House gave it the green light on a 91-8 vote, while it came one vote short of unanimous Senate approval.
Lawmakers also approved House 2 that allows only solvent companies to receive the funds.
State Rep. Chad Brown, D-Plaquemine, who once worked for the state Insurance Commission, said he had reservations about the bill.
“While I voted for it, the reservations I had was that it worked last time, but we were lucky last time because after Katrina and Rita, we went 12 years without any significant storm, so it gave insurance companies and the insurance market the benefit to stabilize,” he said. “But we’re taking a chance, and when it comes to any chance that we have of giving people relief, I’m all for that.”
The session marked an early start for newly inaugurated State Sen. Caleb Kleinpeter, R-Brusly, who won his seat during a special election in November.
Kleinpeter said he and some of his constituents had concerns about the bill, but said his approval was in the best interest of both his district and the state.
“My district covers nine parishes from the Mississippi line in St. Helena, going west to the Atchafalaya River and south, almost to Morgan City,” he said. “I have had constituents reach out to me against this, and those that are for this.”
Some parts of his district feel a bigger brunt than other areas from hurricanes.
“But this is more than just my district,” Kleinpeter said. “As a senator and a statesman, I have to listen to my colleagues throughout the state and determine what’s best for all of us.”
Brown and Kleinpeter both believe the insurance discussion is not over.
Brown said he agrees that insurers will have to get reinsurance before they can participate, but there’s only so much the program can do.
“There’s only so much this program can do, and there’s no silver bullet in this market,” he said. “This can potentially give some relief to the policyholders who went to Citizens and paid far more now than they had paid before for insurance, but there are other things that need to happen before we can really stabilize the market.”
Kleinpeter sees the $45 million as a “temporary fix” and that lawmakers will have to revisit the issue sooner than later.
Brown also believes the plan eventually will head back to lawmakers.
In the meantime, it could potentially provide some relief to policyholders who went to Citizens – the insurer of last resort – and paid more for insurance. “But there are other things that need to happen before we can really stabilize the market.”