Louisiana Citizens Shedding More Policies in 12th Depopulation Effort

Louisiana’s property insurer of last resort has completed another round of policy depopulation — its 12th, the state insurance department said.

Louisiana Citizens Property Insurance Corp. (Citizens) offers property insurance to home or business owners that cannot otherwise obtain it, at rates adjusted annually to keep it noncompetitive with the private market.

This year, five companies have requested 633 residential policies, from a pool of approximately 2,000 policies made available for depopulation. All five have previously participated in the program. They are Access Home Insurance Co., Maison Insurance Co., Ocean Harbor Casualty Insurance Co., Safepoint Insurance Co. and Spinnaker Insurance Co.

Citizens notifies consumers in a letter if their policies have been selected for depopulation.

Policyholders had until Feb. 28 to opt out of moving to a private company and choose to stay with Citizens.

Citizens’ depopulation efforts were begun in 2008. During the annual depopulation process the insurer is required to open up its book of business and offer to transfer policies to the private market. This depopulation results in lower premiums for policyholders and reduces the potential for future assessments, which are charged to all property insurance consumers across the state when Citizens’ exposure exceeds their reinsurance coverage and cash availability.

During the 2018 Regular Legislative Session, a measure was passed that made changes to the Citizens Take-Out Program. Act 131 changes the Take-Out Program from a requirement for Citizens to open its book of business each year into a possibility to offer policies to the voluntary market with governing board approval.

It further allows Citizens to base its offerings on geographic and risk characteristics that reduce its exposure while allowing Citizens’ leadership to ensure that the insurer of last resort has sufficient infrastructure to fulfill its obligations following Louisiana’s next severe weather event.

This year’s depopulation round was the first under the new rules for the program, according to the Louisiana Department of Insurance.