Insurer down to under 90,000 policies

Citizens’ last-resort clients get policies

Five years ago, the state property insurer of last resort was Louisiana’s third-largest homeowners company — trailing only State Farm and Allstate — with 174,000 policies and 10 percent of the market.

By the end of the year, Louisiana Citizens Property Insurance Corp. will have less than 90,000 homeowners policies, or 2.7 percent of the market.

Insurance Commissioner Jim Donelon gives a large part of the credit to Citizens’ annual “depopulation” program.

The program allows private companies to review Citizens’ policies and select those the firms want. During seven rounds of depopulation, private companies have picked up close to 89,000 Citizens policies.

In the most recent round, private insurers picked up 14,268 residential policies. With commercial coverage, Citizens’ total policy count will be around 93,000.

Citizens’ policy count ballooned after hurricanes Katrina and Rita in 2005, as private insurance companies fled coastal areas. By 2008, only State Farm and Allstate held larger shares of the homeowners market,

Citizens customers whose policies are picked up by private insurers benefit by getting lower rates.

State law requires Citizens to charge more than private insurers.

“What is important to realize is that it’s not just Citizens’ policyholders who benefit from depopulation,” Donelon said. “All Louisiana property owners benefit from this reduction of Citizens policies as it reduces the need for future assessments charged to property insurance consumers in the event of another Katrina-level event.”

Donelon reminded property insurance policyholders they must claim their 2009 Citizens assessment rebate by Dec. 31 or lose that money.

Property owners haven’t claimed nearly $59 million in rebates, roughly 53 percent of the total, for 2009, he said. All property insurance policyholders in Louisiana pay an assessment of about 4 percent of their insurance premium to cover Citizens’ debt. The company borrowed close to $1 billion to pay Katrina claims.

Claiming the rebate can be done by filling out the Louisiana Department of Revenue R-540INS tax form for the years that the Citizens Assessment was paid.

Policyholders can also visit www.revenue.louisiana.gov/fileonline, register as a user, and follow the links to Louisiana Department of Revenue’s web application designed to help individuals claim their Citizens rebate. Policyholders can choose to receive the rebate by direct deposit, paper check or a pre-loaded debit card. Individual policyholders may also claim the rebate by amending a prior-year tax return.

Businesses may claim the Citizens rebate by filing out the Department of Revenue Form R-620INS or by filing a current-year or amended tax return.

A copy of the insurance policy declaration page showing proof of the assessment amount must be attached to any claim form.