As natural disasters become more frequent and more severe, the insurance industry is taking a harder look at each state to determine whether doing business there is worth the risk.
Last week, State Farm General Insurance Company announced the non-renewal of thousands of insurance policies in California citing several factors including catastrophe exposure, inflation, reinsurance costs and outdated regulation. This represents about 2% of State Farm General’s policies in California.
California’s insurance department recently acknowledged that overregulation is driving insurers away, and the agency is making an effort to modernize oversight of its marketplace.
Insurers and reinsurers have repeatedly told me they have three major concerns in Louisiana: catastrophe exposure, overregulation and a poor legal environment. I’m doing everything I can to address their first concern through my support for the Louisiana Fortify Homes Program and other resiliency efforts, and the industry is taking notice.
But increasing resiliency is a long-term project that won’t attract companies to Louisiana on its own. We must also modernize our regulatory framework and fix our broken legal environment, and we must do both now. If we don’t enact bold change this session, I believe our ongoing insurance crisis will not just stay the same — it will get worse.
To the residents of our great state, I hope you will join me in asking the leaders at the State Capitol to pass the meaningful insurance reform they are considering this session. This is the only path to creating a competitive and stable insurance market that will help bring premium relief to Louisiana consumers.
About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.