Lawmakers debate over special session to address home insurance
BATON ROUGE, La. (WAFB) - Despite the obvious problem Louisiana faces with home insurance companies, some state lawmakers are still skeptical about putting $45 million into a fund to try to attract new insurance companies to do business in the state, even by means of a special session, which is something Louisiana Insurance Commissioner Jim Donelon is advocating for.
“There is no doubt we’re in the middle of a crisis and that’s why today is so important,” said Donelon to lawmakers on Friday, Jan. 20.
“I think he has a plan, but we have to see if the plan is going to bring a return of investment to the taxpayer,” said Sen. Fred Mills, R-New Iberia.
It’s the commissioner’s view that bringing in more competition will give homeowners more options and reduce price hikes. He also claims at least seven companies have shown interest but many lawmakers take issue that the commissioner’s plan does not guarantee anything in writing.
“It is modeled after the successful program launched after hurricanes Katrina and Rita in 2005,” noted Donelon.
“You don’t have a letter saying, ‘Yes, we’ll come in and we’ll do 50 policies’ or ‘we’ll come in and do 100 policies;’ it’s just a maybe,” said House Speaker Clay Schexnayder, R-Gonzales.
“I would say a probably,” replied Donelon.
A similar incentive was launched in 2005, but since then, many of those companies stopped writing insurance policies here.
“He’s referring to things that have happened in the past and where we failed and ... it appears that he’s saying we fixed some of that,” said Rep. C Denise Marcelle, D-Baton Rouge. “However, I think that we need to take a broader look at the way our insurance is structured, period.”
What was perhaps most unsettling for some who attended the discussion was the fact that the commissioner had no backup plan if lawmakers can’t agree on a $45 million plan.
“Well, I think that’s when we get into session. We’ll have that discussion because I think there can be a ‘Plan B,’ but from my angle, I’m just saying $45 million is a lot to invest without an actual projected return on investment,” added Mills.
Lawmakers say a special session would cost $50,000 to $60,000 per day for a minimum of five days. Although they may not like the idea of having one, some believe the state is left with no choice.
“If the time-sensitive nature of it is such, then I think we need to act,” said Senate President Page Cortez, R-Lafayette.
No decision was made Friday. If a special session were to happen, lawmakers said it would likely take place sometime in February.
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