Louisiana Citizens Property Insurance Policy Count Continues to Drop

December 15, 2017

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.

The eleventh round of depopulation is underway for the Louisiana Citizens Property Insurance Corp. (Citizens) and Louisiana Insurance Commissioner Jim Donelon points to the program’s ongoing success as a sign of the strength of the Louisiana 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,” Donelon said in the agency’s announcement.

As the state’s insurer of last resort, Citizens offers property insurance to any home or business owner that cannot otherwise obtain it at rates adjusted annually to keep it noncompetitive with the private market.

During the annual depopulation process Citizens is required to open up its book of business and offer 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.

According to Citizens, this year five companies requested 10,072 residential policies, dropping the 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 Company, Maison Insurance Company, Ocean Harbor Casualty Insurance Company, Safepoint Insurance Company, and Spinnaker Insurance Company 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.

Source: LDI