The Louisiana Department of Insurance will be taking more steps to regulate insurance premiums in the state during the upcoming legislative session.

One such step will be to fund the Louisiana Fortify Homes Program.

This legislation, which was passed last year but not funded, will provide qualifying Louisiana homeowners, in most cases, with grants to fortify their roofs to withstand severe weather “using methods that meet or exceed the fortified home standards of the insurance institute for business and home safety.”

Louisiana State Rep. Mike Huval believes this program will help mitigate home damage and loss during hurricanes.

“One of the best ways we can prepare is to use stronger materials and construction methods when building and modifying our homes,” he said.

During the upcoming legislative session, they are looking to secure $20 million to fund the program. Huval said once the program is funded, it should “get underway rather quickly.”

Participating homeowners will need to meet eligibility requirements and pay for permits, inspections and similar fees.

The LDI is also presenting legislation that would mandate that insurance companies provide justified discounts or credits to policyholders who build or retrofit their homes to meet fortified standards.

In 2021, Act 30, which allowed insurance companies to provide such discounts, was passed.

“This will insure policyholders that are putting in the time, money and effort to build or retrofit their structures to fortified standards are reaping all the benefits of that decision.”

The LDI will also be seeking an additional $20 million for the Insure Louisiana Incentive Program – which financially incentivizes insurance companies to write new business in Louisiana to offset the insurance crisis that Louisiana has faced in the 2020 hurricanes Laura and Delta.

“The idea is to get these policies out of Citizens as quickly as possible, and as we saw after Katrina, it will attract other companies to come in and start writing as well,” said state Sen. Kirk Talbot.

The need for this program resulted from “unprecedented combination of back to back catastrophic hurricane seasons and a legal environment that led to a greater crisis in Florida… as well as a global reinsurance shortage that hit us all at the same time, which paralyzed the industry and led to the failure of nine insurance companies doing business in our state,”  said Jim Donelon, commissioner of insurance of Louisiana.

The LDI will be distributing $42 million to the 8 insurers that were approved by the joint legislative budget committee. This will lead to nearly $170 million in new premiums, at least half of which will be written in southern Louisiana, according to Donelon.

He estimated 40,000 policies will be depopulated from Louisiana Citizens — the state’s insurer of last resort — and at least 50,000 new policies will be written by the end of the program’s first year.

Talbot said that the program has been more successful than they anticipated. “We blew through the first $42 million right out of the gate.” The approved insurers requested around $62 million.

If the additional $20 million in funding is granted to the program, approximately $250 million of premium will be written in Louisiana, he said.

He also said the solvency monitoring of insurers operating in Louisiana has been enhanced. A third-party has been hired to conduct monthly solvency monitoring and quarterly legislature reports to “watch their reinsurances, monitor their solvency levels like never before.”