Louisiana insurance coverage commissioner to take over two regional insurers going through insolvency
Louisiana Insurance Commissioner Jim Donelon plans to put two regional insurers under government administration because the companies have gone bankrupt due to significant losses related to Hurricane Ida.
The commissioner filed injunctions in the 19th Judicial District Court of Baton Rouge against State National Fire Insurance Company of Baton Rouge and Access Home Insurance Company of New Orleans. The Associated Press reported that the two account for 1% of Louisiana’s property insurance market and that they collectively generate $ 20.5 million in direct premiums.
Once Donelon’s bankruptcy petition is approved by the courts, he can sell the insurers’ assets to pay outstanding insurance claims.
The move is notable given that Louisiana hasn’t liquidated a property insurer in more than two decades, The Advocate said.
After the court issues the liquidation order, the nonprofit Louisiana Insurance Guaranty Association (LIGA) can begin paying policyholders with outstanding claims. LIGA was established by the state in 1970 to provide consumers with a safety net in the event their insurer becomes insolvent during the insurance period. LIGA offers up to $ 500,000 in payments for unpaid claims and $ 10,000 for award refunds.