5 Carriers Receive $29 Million in La. Incentive Grants

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Department to accept next round of applications Feb. 4 through Mar. 3

At a Jan. 11 press conference, Louisiana Commissioner of Insurance Jim Donelon and then-Gov. Kathleen Babineaux Blanco handed out $29 million in grants to five insurance companies who plan to write new homeowners and commercial property insurance policies in the state.

The grants were distributed as part of the Insure Louisiana Incentive Program approved by the Legislature in 2007 that offers matching funds to insurers who agree to take over policies now written by the state-backed Louisiana Citizens Insurance Corp. The idea behind the program is to increase property insurance availability and affordability in the state. It is designed to attract more property casualty insurers to Louisiana and to increase the private market capacity by 15 percent, according to the Louisiana Department of Insurance.

The applicants receiving grants and the dollar value of their grants are: Occidental Fire & Casualty of North Carolina, of Raleigh, $10 million; Southern Fidelity, of Tallahassee, Fla., $7 million; ASI Lloyds, of St. Petersburg, Fla., $5 million; Imperial Fire & Casualty, of Opelousas, $5 million; and Companion Property & Casualty Insurance, of Columbia, S.C., $2 million.

Southern Fidelity and ASI are new to the Louisiana market.

The legislature approved $100 million for distribution through the program. Because not all of the allocated funds were awarded in the first round of applications, submitted between Oct. 2 and Nov. 1, 2007, a second round of applications will be accepted Feb. 4 through Mar. 3, 2008, for the remaining $71 million.

Donelon said he was “thrilled” with the success of the program so far, stating it was “beyond our expectations.” … “We need strong, viable, regional players like these five companies to come into our market and meet our demand.”

Any company not currently licensed to write property insurance in Louisiana may apply for participation in the program, conditioned on the submission of a simultaneous application for authority to write the eligible lines of business. As with the first round of applications, LDI will decide the grant awards and forward all approved applications to the Louisiana Joint Legislative Committee on the Budget for review and approval. Only established firms, with a net worth of $25 million or more, are eligible.

Details on the rules and qualifications for the program are available online at www.ldi.state.la.us in the New Information section of the insurance department’s Web site.