Tuesday, May 28, 2024

Louisiana Senate committee strips requirements from bill for insurers that accept incentive cash

by BIZ Magazine

By Wes Muller, Louisiana Illuminator

Legislation state lawmakers are considering during a special session to shore up Louisiana’s property insurance market advanced out of a Senate committee Thursday, but not before amendments House lawmakers added the day before were removed.

The Senate Finance Committee unanimously approved House Bill 1, sponsored by  Rep. Jerome “Zee” Zeringue, R-Houma. It’s scheduled for full Senate consideration Friday but will have to return to the House for final approval of Senate changes before it heads to the governor. 

The bill would transfer $45 million to the Insure Louisiana Incentive Program for grants to incentivize insurance companies to underwrite new homeowner policies in the state, similar to a program established after Hurricane Katrina.

Before advancing the legislation, the Senate Finance Committee removed House amendments that would have created stricter requirements for insurance companies to qualify for the subsidies and required companies to submit quarterly financial reports to Insurance Commissioner Jim Donelon. Another would have directed Donelon to give preference to insurers that include wind and hail coverage in their homeowner policies. 

Senate committee members expressed concern the House amendments could render the legislation unconstitutional based on a provision that prohibits adding legislation to an appropriations bill. 

In a post-meeting interview, Sen. Jay Luneau, D-Alexandria, explained that appropriations bills are supposed to be legislative instruments that only direct where money is to be spent. If there are provisions in an appropriations bill that, if removed, could stand on their own as laws, it is no longer considered an appropriations bill. 

When Gov. John Bel Edwards ordered the special session, he limited the scope of any legislation to appropriations.

“You cannot insert legislation in an appropriations bill,” Luneau said. 

The Senate Finance Committee also approved House Bill 2, authored by Rep. John Stefanski, R-Crowley, without making any changes. It would forbid insurance companies with an executive or controlling shareholder who held the same position in a failed insurance company from taking part in the incentive program. The same prohibition would apply to insurers whose parent companies failed in Louisiana.

The full Senate reconvenes at 12:30 p.m. Friday, with the House of Representatives  scheduled to meet at 2 p.m. If both chambers are able to agree on a final version of the bills before the weekend, lawmakers could adjourn before the 6 p.m. Sunday deadline by which the special session must end.

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