Bill Summary – FastDemocracy

GREEN SHEET REDIGEST
HB 1                         2023 First Extraordinary Session                         Zeringue
APPROPRIATIONS/GENERAL: Appropriates funding for the Insure Louisiana
Incentive Program.
                                           DIGEST
Proposed law directs the state treasurer to transfer $45 M from the state general fund into the
Insure La. Incentive Fund.
Proposed law appropriates $45 M of budget authority to the Dept. of Insurance out of the
Insure La. Incentive Fund for implementation and execution of the Insure La. Incentive
Program. Requires that funds be used to award grants only to insurers licensed in La.
possessing a minimum financial strength rating of AM Best "B+" or a Demotech financial
stability rating of "A". Further requires any licensed surplus lines insurer applying for a grant
pursuant to the program to have a minimum financial strength rating of AM Best "A".
Proposed law further requires the commissioner to expedite to the greatest extent possible
the approval of certificates of authority, rate filings, form filings, and other necessary
regulatory approvals of qualified insurers to facilitate the underwriting of new policies
pursuant to the program as quickly as possible and to monitor the financial solvency of
insurers that are issued a grant pursuant to the program from funds appropriated in proposed
law. Provides such monitoring shall include an evaluation of the adequacy of insurer
reinsurance programs using catastrophe model stress tests against the insurer's book of
business. Requires the commissioner to take whatever action is necessary to ensure that
insurers receiving grants pursuant to the program from funds appropriated in proposed law
remain financially solvent.
Proposed law additionally requires the Dept. of Insurance to submit annual and quarterly
reports on the program to the House Committee on Appropriations, the Senate Committee
on Finance, and the House and Senate committees on insurance detailing the following
information on grantees receiving grants from funds appropriated pursuant to proposed law:
the amount of premiums written by parish pursuant to the program; the amount of premiums
by parish for property located in the parishes included in the federal Gulf Opportunity Zone
Act of 2005; the amount of premiums by parish removed from the Louisiana Citizens
Property Insurance Corporation; and the total amount of premiums by parish, inclusive of
premiums written pursuant to the program.
Proposed law authorizes the commissioner of insurance to adopt emergency rules pursuant
to the Admin. Procedure Act to implement the Insure La. Incentive Program in conformity
with proposed law.
Effective upon signature of the governor or lapse of time for gubernatorial action.
Summary of Amendments Adopted by House
    The Committee Amendments Proposed by House Committee on Appropriations to the
          original bill:
    1.      Delete requirement that at least 50% of appropriated funds be used to award
            grants to companies with a minimum financial strength rating of AM Best "B+".
    2.      Require nonadmitted insurers applying for a grant pursuant to present law to have
            a minimum financial strength rating of AM Best "A".
    The House Floor Amendments to the engrossed bill:
                                         Page 1 of 2
                                  Prepared by Martha Hess.
   1.    Change terminology from "nonadmitted insurer" to "licensed surplus lines
         insurer" with respect to increased financial strength rating requirement for such
         insurers.
   2.    Add authorization for the commissioner of insurance to adopt emergency rules
         pursuant to the Administrative Procedure Act to implement the Insure La.
         Incentive Program in conformity with proposed law.
   3.    Require quarterly reporting of certain financial data by each grantee that receives
         a grant pursuant to proposed law. Authorize the commissioner to adopt
         emergency rules for the implementation of the reporting requirement.
   4.    Require each grantee to write a certain amount of net written premiums each
         earning period for policyholders whose property was formerly insured by the La.
         Citizens Property Insurance Corporation in order for the grantee to remain
         eligible.
   5.    Require the commissioner to give preference in awarding grants from funding
         appropriated in proposed law to applicants that agree to provide wind and hail
         coverage.
   6.    Make conforming changes to the title of the bill.
   7.    Make technical changes.
Summary of Amendments Adopted by Senate
   Committee Amendments Proposed by Senate Committee on Finance to the reengrossed
        bill
   1.    Removes requirement for quarterly reporting of certain financial data by each
         grantee that receives a grant pursuant to proposed law. Removes authority for the
         commissioner to adopt emergency rules for the implementation of the reporting
         requirement.
   2.    Removes requirement that each grantee write a certain amount of net written
         premiums each earning period for policyholders whose property was formerly
         insured by the La. Citizens Property Insurance Corporation in order for the
         grantee to remain eligible.
   3.    Removes requirement that the commissioner give preference in awarding grants
         from funding appropriated in proposed law to applicants that agree to provide
         wind and hail coverage.
                                     Page 2 of 2
                              Prepared by Martha Hess.