BATON ROUGE, La. (BRPROUD) — On Tuesday, legislators questioned the Louisiana Department of Insurance on what is being done to deal with the skyrocketing insurance rates and companies closing shop in the state.
Both the House and Senate Insurance committees got an update on how the multiple insurance companies closing up shop in Louisiana are having a ripple effect from affordable housing to being able to afford policies.
The Louisiana Housing Corporation said the rising cost of insurance rates is causing affordable housing agencies to either consider closing or cutting off development projects. The rent price is set by the federal government, so they can’t simply raise rent like a normal landlord to cover the cost. There are concerns this will reduce the already limited affordable housing options in the state.
Legislators pushed Insurance Commissioner Jim Donelon on how he plans to get insurance companies to write policies and get over 120,000 people off of the insurer of last resort after about a dozen have left the state over the last few years. Donelon once again pushed for the incentive program to have money put into it. He emphasized that this incentive fund will have an impact on the number of companies that want to come here and write policies here in Louisiana.
The fund is expected to be allowed to take money from the Department of Insurance’s $15 million surplus, once it is approved by the Revenue Estimating Committee and the Joint Legislative Committee on the budget.
Some lawmakers are not confident the fund will work as well as believed. Others pushed the commissioner to find ways to lower rates across the board.
Donelon expects after this hurricane season is over there will be more companies signing up to take people off of Citizens. Some companies have also heard of the incentive and will wait for the money.