Louisiana Citizens Policy Count Dropping Again

January 8, 2018

The Louisiana Department of Insurance (LDI) estimates that the state’s property insurer of last resort has gone from the third largest property insurance company to the 35th in 10 years.

Louisiana Insurance Commissioner Jim Donelon says the success of the Louisiana Citizens Property Insurance Corp. (Citizens) depopulation program shows the strength of the state’s homeowners insurance market. “We have been able to stabilize our homeowners market and find an equilibrium where even consumers in high-risk areas can find better rates in the private market than with Citizens,” he said in LDI’s announcement.

At rates adjusted annually to keep the company noncompetitive with the private market, Citizens offers property insurance to any home or business owner who cannot otherwise obtain it.

During the annual depopulation process Citizens opens its book of business and offers to transfer 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.

In 2017, five companies requested 10,072 residential policies, dropping Citizens’ personal lines policy count to about 39,000 residential policies. For the first time, commercial lines policies were also requested in depopulation.

One company, Safepoint, is authorized to receive 161 commercial lines policies. Including commercial policies, Citizens’ total policy count in 2018 will be about 40,800, down from 174,000 in 2008. The LDI estimates Citizens will have an estimated 0.5 percent of the Louisiana homeowners market — down from 9.8 percent in 2008.

All five companies participating in this year’s round of depopulation have previously participated in the program. Access Home Insurance Co., Maison Insurance Co., Ocean Harbor Casualty Insurance Co., Safepoint Insurance Co., and Spinnaker Insurance Co. are participating.

A letter from Citizens notifies consumers whose policies are selected for depopulation. Policyholders have until February 28, 2018, to opt out of moving to a private company and choose to stay with Citizens.