A breath of fresh air
“I think brokers see this as a positive development,” said Jeff Albright (pictured), CEO of Louisiana Independent Insurance Agents and Brokers. “Our primary concern was to ensure that any insurers that fall under the incentive program are monitored for solvency.”
Billings are protected in legislation to ensure solvency is monitored while also including stress testing for reinsurance programmes.
“We desperately need some market reforms in Louisiana,” Albright said, stressing the urgency of government reconciliation to ensure strong insurance in the state. “The Insurance Department has several companies that have already indicated their interest in participating in the incentive program and will use new capital to create additional market capacity, which is a very positive sign.”
beyond the surface
While environmental assaults including catastrophic hurricanes are the main reason why these bills are formed, there are other factors that have led to difficulties in the market and need to be addressed.
“During the special session, where funding for the stimulus program was discussed, there was a lot of discussion about the need to address long-term systemic issues,” Albright said. This includes a slight deregulation of the insurance sector to give insurance companies more flexibility to conduct their business in Louisiana.
Another key component, Albright noted, is research on “improving the litigation environment in the country in order to encourage the participation of insurance companies.”
Withstand the storm
With the unpredictability of hurricanes and other natural disasters routinely wreaking havoc of varying degrees, it can be difficult to predict how the industry will respond to the next, potentially catastrophic, event.
However, Albright stressed, “Any property insurer that writes business along the Gulf or Atlantic coasts understands that there is potential for hurricane losses.”
“I think some of the fixes we’re doing will help stabilize that market somewhat in the event of a hurricane,” he said.
A call to action
like Business insurance Previously reported, these laws, which were signed into law on February 7, are actually known as HB1 and HB2 and are part of the Insure Louisiana Incentive Program. The first created a $45 million program designed to incentivize insurers to write policies within the country. The latter suppresses companies that have previously filed for bankruptcy from receiving the stimulus.
The state legislature at both the House and Senate levels overwhelmingly approved the bills that were proposed during a special session at the end of January.
“The incentive program is just one part of our plan to protect homeowners and our way of life from the ongoing crisis in the international insurance market. We will continue to fight for Louisiana homeowners, and this is a critical step.” #incest https://t.co/w58Jc6E7HK
– LA Dept of Insurance (LAInsurance Dept) February 8, 2023
The Louisiana Department of Insurance was optimistic about the immediate benefits of this clip, and assured the general public that more modifications would be added in order to provide maximum safety and coverage for people living within the state.
