Legislation designed to move more policies from Citizens approved by Senate panel

BATON ROUGE -- A bill designed to encourage private insurance companies to take policies from the state-run insurer of last resort cleared a Senate committee today. The Insurance Committee gave unanimous support to House Bill 952 by Rep, Chuck Kleckley, R-Lake Charles, sending the measure to the Senate floor for final passage. If there are no amendments added there, the bill will go to...

BATON ROUGE -- A bill designed to encourage private insurance companies to take policies from the state-run insurer of last resort cleared a Senate committee today.

File photoRep. Chuck Kleckley, R-Lake Charles

The Insurance Committee gave unanimous support to House Bill 952 by Rep, Chuck Kleckley, R-Lake Charles, sending the measure to the Senate floor for final passage. If there are no amendments added there, the bill will go to Gov. Bobby Jindal for his veto or signature.

Kleckley's bill would eliminate the provision in existing law that requires an insurance company that wants to assume some policies from the Louisiana Citizens Property Insurance Corp. to take out at least 500 policies at a time.

Denise Brignac, who chairs the board of Citizens, said that the change will allow a company  to take fewer policies by striking the minimum from existing law.

She said the bill does not place a maximum on the number of policies that can be taken from Citizens by a private insurer. It also does not change the existing law that requires Citizens to offer the "take-out policies" at least once a year.

Brignac said that the bill will make all Citizens policies available regardless of where the client lives.

Existing law requires that 25 percent of the policies be taken from some parts of the state and 75 percent be taken from other areas. The bill would remove that distinction.

The companies that take over the policies must have an industry rating of at least B-plus, Brignac said,

Sen. Troy Hebert, I-Jeanerette, the committee's chairman, said that the companies who take over the Citizens polices will "cherry-pick the best ones. Is it first come, first served?"

Al Ater, chief deputy  insurance commissioner, said that is the nature of the business.

Citizens has about 129,000 poliices in effect now.

Ed Anderson can be reached at eanderson@timespicayune.com or 225.342.5810.