Citizens Sheds Another 13,000 Policies in Latest Round of Depopulation
WASHINGTON, D.C. – November 27, 2015 – (RealEstateRama) — Insurance Commissioner Jim Donelon reports ongoing progress in the shift of policies to the private market from the state’s insurer of last resort, Louisiana Citizens Property Insurance Corporation (Citizens). At the same time, he is also reminding property insurance policyholders that the deadline to claim a rebate for the Citizens Assessment charged on their 2011 insurance policies is December 31, 2015. Nearly $34 million, or 52 percent, of the refundable assessments available for 2011 remains unclaimed.
“If you pay property insurance in Louisiana, whether to Citizens or another insurer, you are entitled to the rebate,” said Commissioner Donelon. “However the opportunity to claim the assessment rebate expires after four years, so time is quickly running out to claim the rebate for 2011.”
Following the passage of Act No. 125 of the 2015 Legislative Session, 72 percent of the assessment is refundable. The dollar amount of the assessment can be found on the declaration page of your insurance policy. More than $306 million, or 53 percent, of the available rebates for 2006-2010 have already expired.
Rebates can be requested online, on paper or on your annual tax return. Policyholders may claim the rebate by filling out a one-page form on paper or online and attaching a copy of the insurance policy’s declaration page which shows the amount of your assessment. Residential and commercial forms and additional information is available on the Louisiana Department of Insurance Citizens Rebate webpagewww.ldi.la.gov/citizensrebate. The rebate can also be claimed as a tax credit on your Louisiana Income Tax Return for the appropriate year.
Policyholders can claim rebates for assessments charged in years 2011 through 2015. To date, $195 million, or 62 percent, of the funds available for those years remains unclaimed.
Citizens Sheds Another 13,000 Policies
Commissioner Donelon also reports that three insurance companies new to Louisiana are participating in the latest round of depopulation of Citizens. According to Citizens, this year seven companies will receive 13,245 residential policies, dropping the policy count below 70,000 residential policies and to approximately 3,500 commercial policies.
As the insurer of last resort, it is Citizens’ charge by law to make homeowners insurance available for all residents that are unable to get insurance from a private company. However, it is also mandated that Citizens’ policies be the most expensive policies on the market and that Citizens minimize the possibility of having to assess policyholders for its losses. Depopulation is a process by which some policies can be absorbed by private companies at the same level of coverage with a lower cost to the policyholder while also reducing the risks of future assessments.
Commissioner Donelon says this reduction is predicted to drop Citizens homeowners market share to an estimated 1.5 percent, ranking it 12th in market share size in Louisiana. Citizens’ market share peaked at 9.8 percent in 2008. Over the eight rounds of the Citizens Depopulation Program, Citizens has reduced its overall policy count by 60 percent from an all-time high of 174,000 policies in 2008.
“We are seeing another 13,000 policies moving to the private market in this latest round of depopulation and that’s good news for all policyholders because not only do Citizens’ policyholders benefit from more choices and better prices, but it reduces the need for future assessments charged to property insurance consumers in the event of another Katrina-level event,” said Commissioner Donelon.
The seven companies successfully making offers to write homeowners policies written by Citizens are Access Home Insurance Company, Capitol Preferred Insurance Company, Coastal Select Insurance Company, Maison Insurance Company, Ocean Harbor Casualty Insurance Company, Prepared Insurance Company, and Safepoint Insurance Company. Ocean Harbor, Prepared and Safepoint are new this year to Louisiana. The other four companies previously participated in the Citizens depopulation process.
Citizens’ policyholders whose policies were authorized to be moved to another company have 60 days to decide if they prefer to remain with Citizens. In prior rounds of depopulation less than two percent of policyholders opted to remain with Citizens.
In the eight previous rounds of depopulation, Citizens saw the following reductions in policy counts: round one – 26,595 policies on June 1, 2008; round two – 13,343 policies on December 1, 2008; round three – 3,368 policies on April 1, 2009; round four – 13,466 policies on December 1, 2010; round five – 10,890 policies on December 1, 2011; round six – 6,877 policies on December 1, 2012; round seven – 14,268 policies on December 1, 2013; and round eight – 10,739 policies on December 1, 2014.
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.