Louisiana Insurance Commissioner Jim Donelon announced that Moody’s Investors Service has upgraded the Louisiana Citizens Property Insurance Corporation (Citizens) Assessment Revenue Bonds to Baa1 from Baa2.
The outlook for the company has changed from stable to positive. The rating change affects Citizens $894 million of outstanding Assessment Revenue Bonds.
Moody’s rating rationale points to a healthy property insurance market in Louisiana, according to Donelon’s announcement. Among credit strengths cited for the upgrade are improved management and administrative processes, the successful depopulation program, and demonstrated success at levying and collecting emergency assessments. The state support through the enactment of a tax credit mechanism for those paying emergency assessments, and strong reserves that total two years debt service are also credited for the upgrade.
Citizens is the homeowners insurer of last resort in Louisiana, which saw a significant rise in written premiums in the aftermath of Hurricanes Katrina and Rita with its policy count spiking to 174,000 policies in September of 2008. With the recent removal of 13,500 policies in the fourth round of depopulation, Citizens total will drop to 119,000 and is predicted to have dropped to below a 6 percent market share and rank 5th or 6th in size of market share in our state by the end of this year.
Source: Louisiana Department of Insurance
Topics Louisiana
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