As Louisiana continues to be plagued by insurance woes, with insurers leaving or going out of business in the hurricane-stricken state, some lawmakers say a special legislative session to address the crisis is imminent.
Discussions between Gov. John Bel Edwards, State Insurance Commissioner Jim Donelon and legislative leadership about a possible special legislative session are ongoing, Eric Holl a spokesperson for the governor’s office told the Associated Press Tuesday.
State Senate President Page Cortez plans to meet with Edwards this week to finalize plans for a special session, The Times-Picayune/The New Orleans Advocate reported. Cortez said that legislators are likely return to the Capitol next month. Louisiana’s regular legislative session begins April 10.
Donelon has pressed the governor to call a special session for months as insurance issues in Louisiana have spiraled.
MORE INSURANCE COMPANIES PULL OUT OF LOUISIANA: ‘WE ARE IN A CRISIS’
Following a series of damaging hurricanes in 2020 and 2021 — Delta, Laura, Zeta and Ida — more than 610,000 residential property claims were filed in Louisiana, according to Louisiana Department of Insurance data. As a result, property insurers have paid out $18.4 billion in claims as of June 30,. About $11 billion of that total was paid to homeowners.
But as claims piled up, at least 11 insurance companies that wrote homeowners policies in the state have gone insolvent. Five of the firms left behind about 26,000 claims for the state’s bailout program to close out. In addition, at least a dozen other companies have withdrawn from the state, either by canceling existing policies or announcing they won’t renew them.
The situation has resulted in thousands of families paying higher premiums or moving forward without coverage.
Although Louisiana was spared from devastating storms last year, the state has seen hurricanes making landfall more frequently and leaving paths of destruction.
In addition, Hurricane Ian — although much of the damage was in Florida — is expected to have an effect on insurance outside of the Sunshine State. Many of the companies writing insurance policies in Louisiana are based in Florida, which has struggled to keep the insurance market healthy since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining companies fearful to write or renew policies.
In December, Florida had a special session of its own legislature with the hopes of stabilizing the property insurance market.
In Louisiana, Donelon said he wants to fix the issue by bringing more companies to write policies in that state — a goal that he believes can be accomplished through resurrecting an incentive program. A similar plan was started after Hurricane Katrina struck in 2005.
Donelon is asking lawmakers to let him use $15 million in leftover premium tax revenue to get the incentive program started.
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While lawmakers originally felt the issue could wait to be addressed during the state’s regular legislative session, Cortez said that in order to attract insurance companies to Louisiana they would have to get reinsurance, which is coverage bought to help ensure they can pay out claims. However, companies need to get reinsurance ahead of hurricane season, a process that occurs in late February or March.
Donelon has been invited to appear before the Joint Legislative Committee on the Budget Friday to answer questions about the program and its immediate need.