Round 12: Louisiana Citizens Property Insurance Shedding More Policies

February 20, 2019

Louisiana’s property insurer of last resort has completed another round of policy depopulation — its 12th, the state insurance department announced.

Louisiana Citizens Property Insurance Corp. (Citizens) offers property insurance to any home or business owner that cannot otherwise obtain it, at rates adjusted annually to keep it noncompetitive with the private market.

This year five companies requested 633 residential policies, from a pool of approximately 2,000 policies made available for depopulation, Citizens said.

All five companies participating in this year’s round of depopulation have previously participated in the program. They are Access Home Insurance Co., Maison Insurance Co., Ocean Harbor Casualty Insurance Co., Safepoint Insurance Co., and Spinnaker Insurance Co. A letter from Citizens notifies consumers whose policies are selected for depopulation.

Policyholders have until Feb. 28 to opt out of moving to a private company and choose to stay with Citizens.

The depopulation efforts were begun following Hurricane Katrina, which resulted in a surge in Citizens’ policy count. During the annual depopulation process Citizens is required to open up its book of business and offer to transfer policies to the private market. This depopulation results in lower premiums for policyholders and reduces the potential for future assessments, which are charged to all property insurance consumers across the state when Citizens’ exposure exceeds their reinsurance coverage and cash availability.

During the 2018 Regular Legislative Session, a measure was passed that made changes to the Citizens Take-Out Program. Act 131 changes the Take-Out Program from a requirement for Citizens to open its book of business each year into a possibility to offer policies to the voluntary market with governing board approval. It further allows Citizens to base its offerings on geographic and risk characteristics that reduce its exposure while allowing Citizens’ leadership to ensure that the insurer of last resort has sufficient infrastructure to fulfill its obligations following Louisiana’s next severe weather event.

This year’s depopulation round was the first under the new rules for the program.

Louisiana Department of Insurance

Topics Louisiana Property

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