New Orleans, Louisiana 2021-10-24 12:20:00 –
Beginning Monday, insurers resume the process of not canceling or renewing policyholder coverage in southeastern Louisiana after the state’s top insurance regulators have chosen not to extend the emergency protection issued prior to Hurricane Ida. I can do it.
On August 26, insurance commissioner Jim Doneron Urgent rule 47It prohibits insurance companies from suspending or removing policyholder coverage within the 25 parishes in Ida’s path, even if they have not paid their premiums. The order was extended once, but expired on Sunday, October 24th.
Donelon faces “significant stress” with state insurers facing “significant stress” as it faces more than $ 20 billion in insurance losses and hundreds of thousands of claims in allowing protection to be abolished. Insisted on calling.
According to Doneron, the insurance agency is in contact with “several” insurers facing “solvency concerns” as a result of Aida’s destruction. He didn’t say which insurance company was included.
But last week he learned about the news when Doneron was considering whether to pursue extended policyholder protection. The insurance company had completely withdrawn from the Louisiana market.
Its company, Geo Vera, accounts for 1.63% of the Louisiana homeowner’s insurance market and operates as a surplus carrier, covering a variety of high-risk properties that standard insurance companies cannot cover. Carriers will also leave South Carolina, according to Doneron.
“Because of the loss from Aida, they came in and said,’We’re out of here. We’re leaving the state,'” Doneron said. “This is an important sign that Louisiana companies are really concerned.”
Donelon described other surplus lines like GeoVera and Lloyd’s of London as “cowboys in the insurance industry.” Freed from standard rates and forms, you’ll enter a market where you’re afraid to trample others, and get insurance that’s generally more expensive than regular insurance.
Just six months ago, Doneron said GeoVera assured him that they would stay here and “actively write to the teeth of the coastal recession market” in southwestern Louisiana. It was before Aida tore the devastating road through southeastern Louisiana in the strong winds of the race car.
Doneron said there were enough insurance companies in Louisiana to absorb GeoVera policyholders, but the decision to withdraw the company puts Rule 47 on the state legislature’s insurance committee for another 30 days. Stopped asking for permission to extend.
Independent insurance agents and brokers in Louisiana have called on Doneron to continue protection in a limited way, narrowing protection to those who have experienced property damage, said Jeff Orbright, CEO of the organization. Said.
However, Doneron declined, arguing that emergency protection was equivalent to “free insurance” for policyholders.
This is most often due to unclaimed policyholders after Ida has access to the option to change carriers without paying that 60-day premium. Insurance companies can sue for these payments, but Doneron said he rarely does.
Cancellations do not occur overnight. By law, you must send a notice to your policyholder. And carriers who were in the middle of a non-renewal process when Aida hit would have to start the notification process over, Doneron said.
Moreover, unlike other states, Louisiana insurers are “married” to policyholders after three years of business. Louisiana’s own law protects the insured from not canceling or renewing coverage, except for properties that have experienced more than one “God’s Act” claim within the three-year coverage period.
Still, Doneron expects premiums to increase by 10-12 percent next year. Insurers looking to reduce their exposure may also increase the deductions they charge during the hurricane season to drive away policyholders.
Market volatility occurs as thousands of people in southeastern Louisiana begin the long and difficult process of negotiating with insurance companies to pay damages. Donelon said one-third of all claims due to hurricane Ida were closed, according to a conversation with an insurance agency.
“I’m very curious to hear that thousands of people have these communication problems, slow coordination problems, slow payment problems, but we make consumer complaints about businesses. We’re processing it, “Doneron said.
As frustration grows, state legislators are already considering consumer protection proposals that may be introduced during next year’s session. However, as is often the case with Baton Rouge’s introduction of insurance regulations, the fear of scaring insurers and raising prices often wins reforms.
“Walking is always a very difficult line. First and foremost, I’m here to protect consumers,” Doneron said. “Most of it is to monitor the solvency of the company that buys the insurance … After doing that, the next thing to do is that the insurance is affordable and available to consumers. It is to confirm. “
With ‘several’ insurers nearing insolvency post-Ida, Louisiana allows cancellations to resume | State Politics Source link With ‘several’ insurers nearing insolvency post-Ida, Louisiana allows cancellations to resume | State Politics