[StBernard] Bill could address Citizens markup

[Westley Annis]

"...I want to make the state insurance program the true market of last
resort, not the second-to-last resort." - Jim Donelon, La. Insurance
Commissioner

Mr. Donelon is correct in his goal.  Unfortunately for Louisiana homeowners,
the goal he seeks to achieve is to the greater benefit of the insurance
companies in the long - not to the homeowner who needs relief now.  Mr.
Donelon's logic is to punish homeowners in the specified parishes (most
impacted by tropical storms) making them pay a ridiculous premium for
homeowner's coverage only because insurance companies who will gladly do
business in the rest of Louisiana's "safer" parishes have fled.

I agree with Rep. Jones' there is an inherent sense of unfairness with Mr.
Donelon's plan.

John Scurich
 

-----Original Message-----
Bill could address Citizens markup
by The Associated Press
Friday March 28, 2008, 4:51 PM
BATON ROUGE -- South Louisiana lawmakers are pushing to give some homeowners
a 10 percent break on their property insurance, though the legislation faces
firm opposition from state Insurance Commissioner Jim Donelon. 

The bill could erase the 10 percent markup paid by homeowners insured by the
state's "insurer of last resort," Louisiana Citizens Property Insurance
Corp., in 10 southern parishes. The parishes included are those intersected
by -- or entirely south of -- Interstates 10 and 12. 

Sen. Reggie Dupre, a co-sponsor, said private insurers have stopped writing
new policies south of the interstates. 

"That's the line of demarcation where they don't want to write new policies.
So let's make that the line for not charging the 10 percent," said Dupre,
D-Houma. 

The price break would only kick in when it's determined that the
state-backed Citizens is writing more than 50 percent of new policies in a
parish -- a sign that true competition in that parish's insurance market has
dried up. 

The bill will have to overcome a fight from Donelon, who unsuccessfully
resisted a similar push last year -- he fought legislation, now state law,
that exempted homeowners in 11 southern parishes from the 10 percent hike. 

Donelon said the state's long-term goal should be to increase the number of
private insurers writing policies in south Louisiana. That goal won't be
attained, he said, if the government-backed Citizens is in direct pricing
competition with private insurance companies. 

The measure puts Donelon in a tough political spot: he opposes it because it
conflicts with his long-term plan fix for the region's insurance problems,
but doing so means he opposes a price break for voters. 

"Needless to say, I don't oppose that concept because I want to be
unpopular," said Donelon, a Republican elected to a four-year term last
year. "I want to treat everybody the same, and I want to make the state
insurance program the true market of last resort, not the second-to-last
resort." 

Dupre said he expected a fight over the measure. 

"I know that there'll be a great deal of pushback from the insurance
industry, and from Jim Donelon," said Dupre, D-Houma. "I know Jim Donelon
hates this bill." 

The eleven parishes already exempted from the markup, under last year's
legislation, are: Calcasieu, Cameron, Iberia, Jefferson, Lafourche, Orleans,
Plaquemines, St. Bernard, St. Tammany, Terrebonne and Vermilion. 

Under the right market conditions, the new legislation could also exempt
Acadia, East Baton Rouge, Iberville, Jefferson Davis, Lafayette, Livingston,
St. Martin, St. Mary, Tangipahoa and West Baton Rouge parishes. 

The measure is co-sponsored by Rep. Sam Jones, D-Franklin, Joe Harrison,
R-Labadieville, and Sen. Butch Gautreaux, D-Morgan City. 

Jones is also sponsoring a related, but far narrower, bill -- one that would
exempt his home parish of St. Mary from the 10 percent Citizens markup. St.
Mary is the only coastal parish that was not included in the exemption last
year, and Jones said the parish has no private insurers writing new
policies. 

"Our people shouldn't pay an inflated premium if there's no alternative" to
Citizens, he said.