Fitch Upgrades Louisiana Citizens Bonds

Louisiana’s property insurer of last resort has received a bond rating upgrade from a major ratings agency.

Fitch Ratings raised the rating on two series of revenue bonds issued by Louisiana Citizens Property Insurance Corp. to A-minus from BBB. The rating covers bonds totaling $885.2 million.

A higher bond rating lowers interest costs for the issuer.

Insurance Commissioner Jim Donelon said the rating was raised because of better management at Citizens, including a clean audit and improvements in its financial management system.

The bonds are not the first source of liquidity to meet catastrophic claims. Citizens can first tap funds on hand and then use reinsurance. After that, the insurer can assess private insurers. Those assessments are recouped from policy holders.

Citizens has levied a regular assessment once in its history — following Hurricanes Katrina and Rita — the insurance department said.