Jeff Sadow addressed the topic last week, so I’m not going to make a big deal about the special session they’re convening this week at the Louisiana legislature. Just a couple of things to offer.

It sounds like they’re only going to debate one bill, which would throw a pile of money into an incentive fund that Insurance Commissioner Jim Donelon would use in an attempt to get more carriers to write property insurance here.

This happened in Louisiana after Hurricane Katrina, and it was successful. So they’re doing it in what’s still the aftermath of Hurricane Ida.

And it has to happen now, because February is the month when the insurance industry works the reinsurance market. Otherwise you wouldn’t need a special session and you’d just try to pass something in the regular session to inject some health into the market.

But nobody seems to think this one thing will make much of a difference in Louisiana’s property insurance market coming back to health. For example, here’s what Norman Morris, CEO of the Louisiana Realtors Association, had to say about the call for the special session…

The incentive program being proposed by Commissioner Donelon is a good start, and it must be implemented sooner rather than later due to reinsurance requirements. However, this does not fix the underlying problem of property insurance plaguing homeowners and keeping insurance companies from writing policies in Louisiana. Funding the Insure Louisiana Incentive Program would only be a band-aid, though, and it is not a cure fixing the problems with Louisiana’s property insurance market. The program will not heal us.

Industries are suffering because of this property insurance crisis. A similar incentive program was successful after Hurricanes Katrina and Rita. However, the state has tried to overregulate insurance companies, which has decreased insurance market capacity. Insurance companies need more latitude to work and more flexibility in rating abilities.

This incentive program is not a full solution. Louisiana needs broader reforms. We encourage Commissioner Donelon and the Legislature to pursue legislation in the regular session to increase reinsurance requirements and to require the Department of Insurance to provide insurers more rating flexibility, for instance.

Nobody thinks Louisiana has a healthy property insurance market. Here was the Louisiana Conservative Caucus last week…

While all members of the Conservative Caucus want to help the people of Louisiana and do what we can to help lower insurance costs, there is widespread concern that this special session is strictly limited to moving $45 million dollars to the Louisiana Incentive Fund instead of fixing the underlying problems. This money would be used to “incentivize” insurance companies to write policies in the state instead of changing the regulations to let the free-market invite competition and naturally drive down costs. This idea of an “incentive” has been done before, such as after Hurricane Katrina. However, 40% of the insurance companies that took the Katrina money no longer write policies in Louisiana. “We’re being put into a box to allocate money as a band-aide instead of being able to pass legislation to address the underlying problems,” said Representative Jack McFarland (R – Winnfield), Chairman of the Conservative Caucus.

Last week, members of the Conservative Caucus traveled to Florida to meet with Governor Ron DeSantis to discuss some of the policies that are delivering results there. In terms of insurance reforms, Florida has already enacted and benefited from some of the policy changes suggested by the Independent Insurance Agents & Brokers of Louisiana (IIABL). To increase competition in the insurance market and deliver meaningful rate changes, we need policy reforms instead of handouts. The following is what IIABL recommends to permanently address this problem:

1) Reduce the unnecessary or redundant bureaucracy and excessive regulatory burdens that prevent insurers from effectively managing their business in Louisiana.

2) Reform our bad faith statute and provide a clear standard of how insurers pay property claims. This can be done to protect both citizens and the insurance companies by having a reasonable process for resolving disputes on the value of claims.

3) Add more flexibility to our insurance rating laws.

It is unfortunate that this special session is so narrowly called that it will not result in meaningful rate changes for the very people it is meant to help the most. While the Conservative Caucus will do what we can this special session, we look forward to passing meaningful insurance reforms in the Regular Session that begins in April.

In other words, the session is a waste of time if it’s not followed up by some real reforms in the regular session.

And frankly, we’d be surprised if any real reforms could get passed given the current legislative leadership and the state’s dysfunctional Democrat governor.

But who knows? John Bel Edwards is a lame duck, and so are Clay Schexnayder and Page Cortez, so maybe these guys will think about their legacy and allow the legislature to do something to fix the insurance markets.

It wouldn’t be a terrible idea if they’d use some of that surplus money on drainage projects and other items that would serve to harden Louisiana property against damage. But that really might be too much to ask when Edwards is demanding to permanently grow government with that surplus.