Louisiana has begun accepting applications from property and casualty insurance companies for grants under the Insure Louisiana Incentive Program. According to Louisiana Insurance Commissioner Jim Donelon, the program is designed to "attract more property and casualty providers to [Louisiana] and to increase the private market capacity by 15%.” The program, as outlined in Regulation 82, authorizes the Commissioner to approve grants ranging from $2 million to $10 million to qualified property insurance companies. The total pool of funds to be allocated by the Commissioner is $100 million. The deadline for filing an application is November 1, 2007.
If all $100 million of funds are not allocated, then a second application acceptance phase will take place, whereby additional companies may apply for the remaining funds and those companies already receiving grants may apply to have their grants increased up to the $10 million limit.
Some key requirements insurance companies must meet to qualify for the program include: (1) maintaining capital and surplus amounts of not less than $25 million; (2) maintaining a risk-based capital ratio of 500%; and (3) proof of an existing certificate of authority or simultaneously filed application.
Those companies receiving grants will be subject to the following property insurance requirements: (1) net written premiums must be at least $2 for each $1 of combined insurer capital, which includes insurer allocated capital and the matching grant; (2) the property insurance written must be residential, commercial, mono-line or package property and include equal wind and hail coverage; (3) at least 25% of net written premiums must be from policyholders formerly insured by Louisiana Citizens Property Insurance Corporation and with 50% located in the 37 parishes included in the Gulf Opportunity Zone Act, the parishes most affected by hurricanes Katrina and Rita; and (4) by the end of the second year, at least 50% of net written premiums must be received from policyholders located in the 37 parishes included in the Gulf Opportunity Zone Act.
More information on this program can be obtained from the Louisiana Department of Insurance Website.