INDIANAPOLIS (Feb. 20, 2006)—A representative of the National Association of Mutual Insurance Companies (NAMIC) has expressed her organization’s relief that the Louisiana legislature addressed onerous provisions in two bills before sine die adjournment of its 2006 special session last Friday.
NAMIC State Affairs Manager Tami Stanton said that her members opposed an amendment to SB 14 that would have allowed the Louisiana Insurance Guaranty Association (LIGA) to loan money to the Louisiana Citizens Property Corporation. The financially-strapped Louisiana Citizens Property Corporation is the residual market mechanism, created by 2004 legislation combining the state’s FAIR Plan and the Coastal Plan.
“Loaning money is not the appropriate role for any state guaranty fund. It is particularly unwise in light of insolvencies that may occur as a result of Hurricanes Katrina and Rita,” explained Stanton. The loan provision was ultimately removed in conference committee.
Another important bill for insurers highlighted by Stanton was SB 7 which, in its introduced version, stated an insurer could not use the floodwater mark or the fact that a home was displaced from its foundation as “exclusive proof” to deny a claim. The bill also included extreme penalties for any violations.
“Not allowing insurers to use the information available in settling claims is not in the best interest of all policyholders or the financial stability of insurers,” reported Stanton. She said House amendments removed the excessive penalties, changing the bill’s language to say that an insurer cannot use the floodwater mark or the displacement of the structure from its foundation “without considering other evidence, when determining whether a loss is covered.”
The 2006 regular session of the Louisiana State Legislature will convene on March 27 and adjourn on June 19.
NAMIC members write 43 percent of the homeowners market and 34 percent of all lines in the state of Louisiana.
For further information, contact
Rick Nelson, APR, CAE
(317) 875-5250 Tel
(317) 879-8408 Fax
Posted: Monday, February 20, 2006 12:00:00 AM. Modified: Tuesday, February 21, 2006 4:04:31 PM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.