House approves change for 'named storm' deductibles
By Ed Anderson - The Times-Picayune, May 06, 2009

BATON ROUGE -- Homeowners should be hit with only one named-storm deductible during each hurricane season and not one for each storm, the House determined Wednesday.

By a 99-0 vote, lawmakers approved House Bill 333 by Rep. Chuck Kleckley, R-Lake Charles, chairman of the House Insurance Committee, sending it to the Senate Insurance Committee.

Kleckley said insurance companies vary in how much of a deducible they impose on policyholders. He said he expects insurers to increase premiums by 1 percent to 2 percent if the multiple deductibles are not charged each time a storm or hurricane hits.

If passed by the Legislature and signed by the governor, the bill will go into effect Jan. 1 so that individual policyholders will not be assessed multiple deductibles next year when their policies renew.

Rep. Regina Barrow, D-Baton Rouge, asked Kleckley if he could make the bill effective sooner. "There are a lot of moving parts here," he said. "I will look at the bill between here and the Senate. I don't want to have any unintended consequences."

Earlier Wednesday, the Senate Insurance Committee put off for one week a vote on Senate Bill 193 by Sen. Gerald Long, R-Winnfield, to return to the treasury about $75 million in a special incentive fund to attract insurance companies to the state.

Existing law set up a $100 million fund to help bring companies to Louisiana by making $2 million to $10 million in state grants available to companies that put up a match and agreed to write homeowners policies.

As part of the deal, the companies had to take at least 25 percent of the high-risk policies out of the state-run Louisiana Citizens Property Insurance Corp.

After three rounds of applications, only five insurance companies have taken advantage of the program, drawing about $29 million. With interest on the untapped $71 million, the pool is now about $75 million, according to Insurance Commissioner Jim Donelon.

Long's bill originally sought to make changes in the incentive program and allow each policyholder to receive a part of the $75 million. He amended the bill during the hearing to repeal the program and send the money back to the state treasury for general spending needs.

He said giving policyholders a pro-rated share of the money left would have meant about $30 to $35 rebated.

"I see an opportunity slipping away," said Sen. Troy Hebert, D-Jeanerette, the panel's chairman. He asked Long to "hold this in the barn one more week" to give Donelon's office one more chance to see if any more insurance companies are interested in participating in a possible fourth round of offers.

"Let's see if we can sweeten the pot," Hebert said. "Once we let this $70 million go, it is gone. I know they (administration officials) are going to raid the fund."

He said that many House members already are planning how to spend the $71 million to $75 million to offset some cuts in the governor's budget.

Deputy Insurance Commissioner Denise Brignac said that she doubts there will be any takers but would contact insurance companies to see if there is any further interest in the program.

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