The governing board of Louisiana’s state-backed property insurance firm on Aug. 13 approved a reduction in a fee imposed on policyholders, money that goes to pay off debt incurred because of Hurricane Katrina claims.
All property insurance policyholders in the state now pay a 5 percent fee – an “assessment” – to pay off $1 billion in Katrina debt incurred by Louisiana Citizens Property Insurance Corp. in 2006. The fee is paid by homeowners and commercial insurance policyholders, whether insured by Citizens or private firms.
The Citizens’ board agreed to lower that fee to 4.3 percent. For the average homeowners policyholder in Louisiana, one paying about $2,000, the change will mean a savings of $14 per year.
The board considered but did not act on a proposed 2010 rate increase supported by Citizens CEO John Wortman. Several board members, including Treasurer John Kennedy, said they were concerned that the proposed increase was partly based on 2008 data that has not been audited.
The firm has audited books for 2004-07 and is waiting for an audit of its 2008 books from Legislative Auditor Steve Theriot’s office, expected before Oct. 1. The company used data from 2004-08 to calculate the proposed statewide average rate increase of 9.2 percent.
Wortman said the rate hike would be higher, 9.5 percent, if the company only considered data from years that have been audited.
The board agreed to meet again Aug. 21. Wortman said he will have more information on the audit, and hoped the board would approve a rate increase, at that meeting.
Topics Louisiana Pricing Trends
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