Private Companies to Take More of State-Backed Insurer’s Policies

More than 20 percent of the state-backed insurance company’s roughly 165,000 policyholders may be buying their coverage from private insurers by June 1, insurance officials said.

“The number of policies varies, but I would expect it’s probably in the 35,000 range,” Citizens Chief Executive Officer John Wortman said.

The majority of the policies written by Louisiana Citizens Property Insurance Corp. are homeowners policies.

The Louisiana Department of Insurance, Citizens, insurance agents and private insurers agreed on the procedures for the switchover from Citizens in March.

There are six to 10 companies looking to pick up policyholders from Citizens. Under the new guidelines, by April 15 those picking companies are to get agents’ approval to pick up individual policies.

By May 1, the private insurers must provide Citizens with a list of those policies. By June 1, the private insurers must formally notify policyholders and their agents that the private companies are now providing coverage.

However, Dale Spaht, president-elect of the Professional Insurance Agents of Louisiana, said it may be difficult to transfer all the policies by June 1.

Insurance agents are charged with choosing the private insurer for each policyholder. Only two weeks remain to examine each policyholder’s situation and figure out the best situation for that customer, Spaht said.

Insurance Commissioner Jim Donelon said the process is great news because it means insurance companies are competing for new business, and the state is making progress in its efforts to get out of the insurance business, he said.

Source: The Advocate.