The Louisiana House of Representatives agreed to a bill that supporters say would improve investor confidence so the state-created insurance company for homeowners who can’t get insurance on the open market can borrow money to pay claims after the hurricanes.
The bill (Senate Bill 14) by Sen. James David Cain, R-Dry Creek, would bar the Louisiana Citizens Property Insurance Corp. from dissolving until its outstanding debts have been paid or were covered in some way.
Supporters said the bill, approved 102-0, would assure investors that the LCPI wouldn’t default on bonds issued to cover claims after the hurricanes. The corporation has received approval to borrow up to $1.4 billion by issuing bonds to pay for insured home damage, though corporation officials said they intend to borrow less than that.
Before it reaches final passage, the bill must go back to the Senate for approval of changes, including the removal of Cain’s provision that would give the state-run insurance corporation the ability to borrow money from the Louisiana Insurance Guaranty Association.
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