Insure Louisiana Incentive Program Could be Updated by Pending Legislation

The Louisiana Department of Insurance’s Legislative Agenda for 2008 includes proposed Senate Bill 44 which, if passed, would provide for a third invitation for grant applications between $2 million and $10 million under the Insure Louisiana Incentive Program (“Program”). This grant money would be available to existing and new insurers, including those that previously received grant money under the Program.

If passed by the Louisiana Legislature, the Louisiana Insurance Commissioner would schedule a time frame for applications. Any insurers not already admitted in the Louisiana market would need to apply for, and be granted, admission in concert with the Insurance Commissioner’s scheduled time frame.

We have been informally advised by senior officials from the Louisiana Department of Insurance that they estimate approximately $40 million of the originally allocated $100 million has been granted to prior applicants under the Program.

Under current law, the difference of approximately $60 million is to be returned to the State’s Treasury. Under the current legislative proposal, this difference would be available for the third invitation for grant applications.

Another provision in Senate Bill 44 would authorize the Insurance Commissioner to promulgate rules to monitor the net written premium of insurers receiving grant money and to seek the return of grant money on a pro rata basis for failure of the insurer to fulfill the requirements of the Program.

We have attached Senate Bill 44 for your review.

There are no assurances at this point as to whether this Bill will pass and any possible modifications or conditions which may apply. We will continue to monitor this matter and report as we receive material status information.

Should you have any comments or questions, please feel free to contact this office.

 

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