Louisiana’s property insurer of last resort has gotten permission to secure a $75 million cash line of credit in case a hurricane damages the state.
The Louisiana Citizens Property Insurance Corp. has enough money set aside to cover a $110 million legal judgment against the company, but that could nearly drain its bank account. So, the Bond Commission agreed to allow the insurer to establish the credit for a bank loan in case of a catastrophic event where the company would need millions to pay claims.
Treasurer John Kennedy says Citizens won’t draw down the money unless there is an emergency.
The $110 million judgment, still being argued in legal proceedings, was levied against the company for its slow movement in paying hurricane damage claims in 2005.