The Insurance Commissioner from the state, Jim Donelon, has announced new participation in this effort.
A recent announcement from Insurance Commissioner Jim Donelon has shown that three new insurers have added themselves to the efforts to reduce the number of policies carried by Citizens Insurance in Louisiana.
Citizens Property Insurance Corp. has been working to shrink its size after becoming quite bloated.
The state’s property insurance company of last resort had been swelling in size following Hurricane Katrina in 2005, and then hit its peak size following Hurricane Rita in 2008. Since that time, Citizens Insurance has been working hard to try to shed a great deal of the bulk of the policies that it has accumulated. The problem has been in drawing homeowners insurance companies to offer affordable policies within the state that would provide Citizens’ customers the chance to switch.
Now Citizens Insurance will be dropping another wave of policies as three more insurers step in to help.
Citizens’ own figures show that there have been seven different total insurance companies, this year, that will be taking on 13,245 homeowners policies. By the close of 2015, this will bring the number of policies staying with the state supported company down to under 70,000 residential policies, as well as about 3,500 commercial policies.
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As the company is meant to provide coverage as a last resort for Louisiana residents, Citizens is required to make its coverage available to anyone in the state who can’t purchase homeowners insurance from a private company. That said, a mandate has now been put into place that would make policies from that insurer the most expensive ones on the market. It also requires that the company lower the risk that it will need to be responsible for assessing policyholders for its losses.
In order to bring it back down to a manageable size, it has been working on a gradual depopulation process that will allow private homeowners insurers to take over the Citizens Insurance policies when they are able to provide the same level of coverage to consumers, but at a lower cost and at a lower chance of having to conduct future assessments.