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Louisiana Legislature special session on insurance may take place in February [1]

["Julie O'Donoghue", 'More From Author', '- January']

Date: 2023-01-13  

Gov. John Bel Edwards’ administration and legislative leadership said it’s now likely that a special session of the Louisiana Legislature dedicated to the state’s homeowner insurance crisis will be scheduled for February.

Senate President Page Cortez, R-Lafayette, said he and the governor are expected to meet next week to finalize whether a special session is necessary and determine the dates for it. Lawmakers would likely have to meet before Mardi Gras on Feb. 21, Cortez said.

Edwards’ budget chief, Commissioner of Administration Jay Dardenne, also said Friday a February special session on the homeowners’ insurance crisis was likely.

Insurance Commissioner Jim Donelon, R-Metairie, is asking Edwards and lawmakers to put at least $45 million in a special fund to attract property insurance providers to Louisiana. Legislators must be in session to vote on a diversion of money that large in the state budget.

Whether any other issues – related to insurance or not – would be addressed during the special session is not clear. Dardenne said he expected it to be “narrowly drawn,” meaning very few other issues could be debated.

The state has seen several insurance companies go under or pull out of Louisiana after being walloped by major hurricane seasons in 2020 and 2021. The collapse of the market is dumping more homeowners’ policies into the state’s insurer of last resort, Louisiana Citizens Property Insurance Corp., and driving up housing costs.

To address the crisis, Donelon has proposed resurrecting an insurance incentive program originally put in place after hurricanes Katrina and Rita in 2005. Companies willing to write policies for higher-risk properties would receive public grants to help cover their costs. The goal is to divert policies from Louisiana Citizens, which offers more expensive plans than the private insurance market.

The Legislature will convene for its annual regular session in April, but Donelon has argued he can’t wait that long to set up the insurance incentive fund. Companies he is trying to lure to the state are looking to purchase reinsurance, which protects them from failing, in the spring.

The Edwards administration and legislative leaders were initially skeptical that a special session was necessary. Last month, Dardenne and Cortez had both said they thought the $45 million transfer could wait until April, when lawmakers got their regular session underway. But after further talks with Donelon, they’ve become convinced that the money may need to be moved earlier than they thought.

“The timeframe of the regular session would be too late,” Cortez said.

Only the governor or the majority of legislators are allowed to convene a special session in Louisiana.

While financing a $45 million insurance fund may typically be controversial, legislators and the governor are currently sitting on a bunch of unallocated money. The state is expected to bring in $1.5 billion in unexpected revenue over the next 18 months, which should ease discussions over whether the state can afford Donelon’s incentive program.

This story was published earlier by the Louisiana Illuminator, an affiliate of the nonprofit States Newsroom network, which includes the Florida Phoenix.

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[1] Url: https://floridaphoenix.com/2023/01/13/louisiana-legislature-special-session-on-insurance-may-take-place-in-february/

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