FOR IMMEDIATE RELEASE

December 6, 2016

Policy Count for State’s Insurer of Last Resort Falling Below 60,000

Citizens’ Rebate Deadline Approaching December 31

Insurance Commissioner Jim Donelon is announcing the tenth successful round of depopulation for the Louisiana Citizens Property Insurance Corporation (Citizens). During the depopulation process Citizens opens up its book of business and transfers policies to the private market. This results in lower premiums for policyholders and reduces the potential need for future assessments charged to all property insurance consumers across the state. As the state’s insurer of last resort, Citizens offers property insurance, to any home or business owner that cannot otherwise obtain it, at rates adjusted annually to keep it noncompetitive with the private market. According to Citizens, this year eight companies will receive 10,304 residential policies, dropping the personal lines policy count to about 52,500 residential policies. Including commercial policies, Citizens’ total policy count will approach 54,500, down from 174,000 in 2008.

“The number of personal lines policies shed by Citizens has truly exceeded our expectations. We were optimistic that the total policy count would dip below six figures – but to see Citizens reduce its policy count so dramatically in this short amount of time really speaks to the strength of the competition in our state,” said Commissioner Donelon. “I’d like to congratulate Chief Executive Officer Richard Newberry, Chief Operating Officer Vijay Ramachandran and the rest of the leadership who are continuing the important work of reducing Citizens’ exposure.”

Of the eight companies participating in this round of depopulation, two companies, Excalibur National Insurance Company and Spinnaker Insurance Company, are participating in depopulation for the first time. Access Home Insurance Company, Capitol Preferred Insurance Company, Maison Insurance Company, Ocean Harbor Casualty Insurance Company, Safepoint Insurance Company, and Southern Fidelity Insurance Company have all previously participated in depopulation. Following the latest round of depopulation, Citizens will have an estimated 0.8  percent of the Louisiana homeowners market – down from 9.8 percent in 2008.

While not part of the depopulation process, Citizens’ commercial insurance policies have also been on a sharp decline. In 2013 there were 4,900 commercial policies. That figure has been reduced by more than 50 percent to fewer than 2,200 policies today. Additionally, Commissioner Donelon recently approved a statewide commercial rate reduction submitted by Citizens during its legally required annual rate review to keep those rates noncompetitive. Although the impact of the filing will vary across parishes, the overall impact is a -5.9 percent rate reduction taking effect February 1, 2017. Earlier this year Commissioner Donelon approved a statewide personal lines rate cut of -2.4 percent that took effect June 1.

“The ability to grant these rate reductions is a sign of how far both our homeowners and commercial markets have come since Hurricanes Katrina and Rita,” said Commissioner Donelon. “Citizens’ new rates reflect an overall positive trend in Louisiana’s property insurance market.”

Citizens attributes the rate cuts to added competition in the homeowners and commercial markets with some major insurers implementing rate decreases, as well as reduced reinsurance costs. Citizens’ reinsurance costs have dropped as a result of lower reinsurance prices and fewer policies held by Citizens. 

Consumers whose policies are selected for depopulation will be notified by Citizens by letter. Policyholders will have 60 days from the date on the letter to opt out of the assumption and choose to stay with Citizens. More information can be found on the Citizens website at www.lacitizens.com/depopulation.

Citizens Assessment Rebate Deadline Approaching

Commissioner Donelon is also reminding Louisiana property insurance policyholders that the opportunity to file for the refundable 2012 Citizens assessment will expire on December 31, 2016. The Citizens Assessment is to pay off bonds issued by Citizens to cover the costs of damages caused by Hurricane Katrina. More than $35 million, or 53 percent, of the refundable assessments available for 2012 remains unclaimed.

Policyholders that have paid the assessment can file for a rebate online, on paper or on their annual tax returns. Residential and commercial forms and additional information is available on the Louisiana Department of Insurance website at www.ldi.la.gov/citizensrebate. Policyholders can currently claim rebates for assessments charged in years 2012 through 2016.

Following the passage of Act 125 of the 2015 Legislative Session, 72 percent of the assessments for 2012 through 2015 are refundable. Following the passage of Act 9 of the 2016 Second Extraordinary Legislative Session, 25 percent is refundable for the assessments paid for 2016. The dollar amount of the assessment for each policy can be found on the declaration page of that insurance policy. 

Click here for an infographic on Citizen’s Rebate Funds Available.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.  Click here to download the LDI logo.