[StBernard] Governor Blanco meets with state's insurer of last resort

Westley Annis westley at da-parish.com
Wed Sep 13 20:30:55 EDT 2006


Governor Kathleen Babineaux Blanco meets with state's insurer of last resort, Seeks information on assessments and affordability


BATON ROUGE, La. - Governor Kathleen Babineaux Blanco met today with heads of the Louisiana Citizens Property Insurance Corporation (LA Citizens) to get the latest information on the solvency of the state-run insurance company and to ensure that the company is current in addressing residents' claims.

"Affordable insurance is a critical piece in our road to recovery," Governor Blanco said. "I asked Citizens to bring me their most up-to-date information so we can access the strength of the corporation and the challenges that lie ahead."

Governor Blanco specifically requested a full briefing on the corporation's hurricane-induced debt of more than $1 billion, which has triggered an assessment on Louisiana property insurance policies paid by consumers across the state. According to Citizens, the current statewide 15 percent assessment will be reduced to 3.6 percent for 2007. The debt will be paid out in seven years, barring no future major hurricanes the size of Katrina or Rita.

In her current budget, Governor Blanco tapped into the state's emergency fund set aside for disasters to reduce Citizens' debt by $50 million for this year, provided there are unused dollars in that fund.

Governor Blanco is also researching the feasibility of using additional state funds to pay down that debt in the near term in order to provide temporary relief to consumers, but adds, "We will always live with hurricanes and we must measure whether this is the best immediate and long term use of taxpayer dollars, given that future storms could leave Citizens in a deficit again."

"We must have affordable insurance, and of course we want to sustain a strong and growing private insurance market in this state as well. This will ultimately reduce both the risk to La Citizens Company and the cost to Louisiana residents."

During the morning meeting in the Governor's office, Citizens reported that they have processed 90 thousand claims from the storm and are near completion.

LA Citizens is the state-created property insurance "market of last resort" for homeowners and businesses who cannot buy property insurance from private insurance companies.

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