Report Recommends Phasing Out Louisiana’s State Insurer Citizens

Among the many recommendations made by Louisiana’s Commission on Streamlining Government in its Dec. 14 report to the state legislature is one that would phase out the state’s property insurer of last resort.

The commission advised that governance of Louisiana’s “FAIR and COASTAL plans be administered pursuant to the laws governing the plans that were in effect before the adoption of Act 1133 of the 2003 regular legislative session creating the Citizens Property Insurance Corporation.”

Under the commission’s recommendation, Citizens would “cease all operations after its debts are paid off and if private insurance and/or the FAIR and COASTAL plans are established.”

While acknowledging that reforms to Citizens are needed, the Louisiana-based Pelican Institute and the Heartland Institute in Chicago are urging that the legislature not undo progress made by Citizens in stabilizing the property insurance market in Louisiana.

In a report released by the Pelican and Heartland institutes, “Real Reform for Louisiana Citizens Property Insurance Corp,” Eli Lehrer, a senior fellow at Heartland and the report’s author, advised the legislature:

• To make sure any new entity that might replace Citizens should continue its practice shifting policies to the private market;
• Realize that privatizing Citizens won’t do much by itself;
• Subject the replacement program to state ethics rules; and
• Require any new entity to purchase private reinsurance.

The Pelican/Heartland report is available online at http://www.heartland.org/full/26575/

Sources: Louisiana Commission on Streamlining Government; The Heartland Institute

Topics Carriers Louisiana