La. House approves Incentive fund dollars for insurers

NEW ORLEANS (WVUE) - A bill to fund incentives for insurance companies cleared a major hurdle in the legislature on Wednesday (Feb.1).

After hours of questioning Insurance Commissioner Jim Donelon, the House voted 90 to 8 in favor of House Bill 1, which places $45 million into an incentive fund to help attract insurers to Louisiana.

Eight insurers failed financially after the 2020, and 2021 hurricanes in Louisiana and some others stopped writing wind and hail policies causing Louisiana Citizens, the state’s insurer of last resort, to inherit 125,000 policies.

Donelon thinks the incentive funds will entice more insurers to write coverage in the state.

“It will incentivize companies to come write business in our state in hard-to-write areas, particularly in coastal Louisiana. By doing that, we will not only benefit those who are faced with getting their coverage from the market of last resort that just experienced a 63% rate increase across the board,” said Donelon.

Rep. Jean Paul Coussan, R-Lafayette, questioned Donelon about what he said was fraud, waste, and abuse in the insurance industry.

“These companies have the free ability to spend this extra profit on marketing, advertising, any other expense line that they’d like to spend it on, correct?” asked Coussan.

Donelon replied, “With the limitation on how they invest their money which is regulated generally, the answer to your question is correct but only you [legislature] can put those limitations in place, I can’t.”

HB 2, which prohibits insurers who filed for bankruptcy or were declared insolvent also passed out of the House.

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