Six Insurers Apply for $34 Million in La. Incentive Grants

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Six insurance companies, including two newcomers to Louisiana, have applied for $34 million in matching grants from state government, in a program aimed at getting more insurers to write policies along the coast.

Insurance Commissioner Jim Donelon said another insurer has asked for an extension of the Nov. 1 deadline to apply for the financial incentives. Another applied but did not qualify.

The firms applied for the full range of grants, from the maximum $10 million to the minimum $2 million.

Donelon’s office now will determine how many of the six qualify and how large their grants should be. Those decisions will be made by the end of the month, he said.

The incentive program, approved by the Legislature this year, offers matching money to insurers who agree to take over policies now written by the state-backed Louisiana Citizens Insurance Corp. The program is aimed at lowering property insurance rates by luring more companies to Louisiana and heightening competition.

Only established firms, with a net worth of $25 million or more, are eligible.

The applicants, and the dollar value of their grant requests, are:

-Occidental Fire & Casualty of North Carolina, of Raleigh, $10 million.
-Southern Fidelity, of Tallahassee, Fla., $7 million.
-ASI Lloyds, of St. Petersburg, Fla., $5 million.
-Imperial Fire & Casualty, of Opelousas, $5 million.
-Bankers Insurance Group, of St. Petersburg, Fla., $5 million.
-Companion Property & Casualty Insurance, of Columbia, S.C., $2 million.

Southern Fidelity and ASI would be new to the Louisiana market. Both have submitted applications to the insurance department to write policies here.

The Insure Louisiana Incentive Program authored by Representative Karen Carter was enacted through the passage of Act 447 of the 2007 Regular Session of the Louisiana Legislature and signed by Governor Kathleen Babineaux Blanco. The goal of the program is to attract more property and casualty insurers to Louisiana and to increase the private market capacity by 15 percent.

The Legislature’s budget committee must approve all grant payments. The insurance department anticipates disbursing funds to the approved applicants by the first of January 2008.