New Louisiana Commissioner Sits Down to Nation's Largest Plate
With nearly $12 billion in losses and 1 million insurance claims, to say new Louisiana Insurance Commissioner Jim Donelon has a lot on his plate may be the understatement of the decade.
Katrina and Rita mess aside, the bar is set high for the third-generation New Orleans native, after previous La. commissioners left much to be desired out the position. (See our related posts: here and here.)
Recently, Commissioner Donelon sat down with Eleanor Barrett of BestWeek to talk about how the hurricanes affected him personally, as well as how the state is planning to satisfy both consumers and insurers.
Donelon, whose extended family lived near where the 17th St. Canal levee broke, understands the plight of Louisianans without a home, but states that there's not a "simple straightforward answer" to the problem, or the industry would have figured one out already. Donelon goes onto say that in light of these experiences [hurricanes], he gathers that the flood coverage issue is pretty well understood in the Gulf Coast, perhaps implying that folks should have known better than to forgo flood insurance. Nonetheless, he did not give a definitive answer as to whether or not the government plans to swoop in and save these poor folks.
Donelon is, however, upfront with the state's plans to help Citizens Property Insurance Corporation, the last-resort insurer in La., stay afloat despite its near $750 million shortfall in paying out $1.4 billion in hurricane-related claims.
We're going to go with them to Wall Street to sell a bond of $800 million that would be used to finish paying the claims that were filed by their 125,000 homeowners policyholders that had damage from hurricanes Katrina and Rita, and leave some cash on hand for continued operations.
Commissioner Donelon went on to project that Citizens business will "inflate to 200,000 policies" due to the simultaneous surge in demand for home insurance and the "shrinking availability in the market."
This is good news for Citizens and probably for other insurers in the area (i.e. the insurers who didn't high-tail it inland to, say, Wisconsin). As for homeowners, I guess we'll continue to wait and see.
Source: http://www.insurancenewsnet.com/article.asp?a=top_news&lnid=362330025">Insurance News Network (Sorry everyone, this article for subscribers only! Same with BestWeek.)
