Tag: Lousiiana Insurance Commissioner Jim Donelon

Jim Brown

Thursday, January 6th, 2011
Baton Rouge, Louisiana

A HAPPY NEW YEAR FOR INSURANCE RATES ALONG THE GULF COAST? NOT REALLY!

So happy New Year! And by the way, get ready for higher property insurance rates along the Gulf Coast, particularly in Louisiana. One would think that if anything, homeowner’s rates would be going down. After all, there has been virtually no hurricane activity in the Gulf for the past four years. And with the national economic slump, home prices have dropped which should translate into lower insurance rates. Not so say the experts. Here are a few reasons why many states, particularly my home state of Louisiana, will see higher rates in the coming year.

Huge claims for the BP Gulf Oil spill will definitely boost insurance rates for the oil industry. No one at this stage can even guess what the final insurance costs will be from both the damage and years of ligation from the Gulf spill. Most of the larger oil companies are self insured, which means they will have to divert funds from operating costs into designated reserve funds. Independent companies, that produce both oil and gas, will see their insurance costs go up. Higher insurance costs mean cut backs, possible layoffs, and higher prices for both oil and gas. And those insurance companies that have taken a big hit over the Gulf spill will have no choice but to raise rates for all lines of insurance, including homeowners.

Citizens Property Insurance Company in Louisiana continues to run amok, and be a factor in higher insurance rates. Louisiana taxpayers are on the hook for well over a billion dollars because of the state created company’s mismanagement. The company is now bragging that it has reduced the number of policies it is selling. But this becomes a catch 22. As Citizens looses customers, the overall risk increases. A new study by the Insurance Information Institute pointed out the Louisiana state run plan still maintains a “precarious financial condition.” Simple translation — it’s broke, and will be for years. Last month the company asked the Louisiana Insurance Department for an increase that in some south Louisiana parishes will top 24%. Continue reading “Jim Brown”

It’s a ‘Bermudan’ day in the neightborhood…Paige St John at the Herald Tribune exposes why ‘buying Bermuda’ is like being hooked on crack.

Is Paige St John at the Herald Tribune a member of the Slabbed Nation?  Let them eat cake indeed Mikey.

The new Florida norm are carriers like ACA Home, a tiny St. Petersburg home insurer started after 2005 with funding in part from a Bermuda reinsurer.

ACA Home has no employees and pays an affiliate, American Strategic, to run its business.

Financial filings show reinsurers take 86 cents of every premium dollar ACA collects – $9 million of the $10.5 million it collected in 2009.

The cost for turning over almost all of its risk is high. ACA pays as much as 33 cents for $1 of protection against the most likely kind of storms, the equivalent of paying $66,000 a year to insure a house worth $200,000. Continue reading “It’s a ‘Bermudan’ day in the neightborhood…Paige St John at the Herald Tribune exposes why ‘buying Bermuda’ is like being hooked on crack.”

What a performance! Donelon lip synchs the State Farm Song

Maybe the Commission can’t carry a tune in a bucket – or maybe there’s something else in the bucket he’s carrying.  Whatever the reason, Jim Donelon is definitely out of tune with the voters when he lip synchs the State Farm song.

The Times Picayune has the story:  State Farm tries again for a rate increase on Louisiana homes.

State Farm Fire and Casualty Co., the state’s largest residential insurer, is asking for an average 9.9 percent rate increase for homeowners coverage in Louisiana.

The filing with the Department of Insurance comes just over a month after Insurance Commissioner Jim Donelon rejected the company’s request for an average 19.1 percent rate hike. Donelon called that proposal unreasonable and unjustified…

That “unreasonable and unjustified proposal” has been replaced with the same song, second verse: Continue reading “What a performance! Donelon lip synchs the State Farm Song”

Slabbed Daily July 22-24. Lets tie a few things together

ying-yangThere have been a good number of news tidbits that do not necessarily constitute a post here on Slabbed on their own but when taken together tie up several loose ends and lend context to a story that does merit it’s own post in Mike Chaney’s recent insurance forum held last Thursday and Friday here on the coast.  So let’s backtrack a week and shake us up slabbed insurance cocktail by beginning with Anita Lee’s coverage of day 2:

Gov. Haley Barbour joined the coastal insurance debate Friday, telling an audience he believes regional compacts would be the best way to regulate wind coverage in coastal zones from Texas to Maine.

Barbour introduced The Travelers Insurance Cos. president, Brian MacLean, to explain the company’s proposal for improving the coast insurance market. Insurers have pulled back from coastlines in recent years, leaving state-run wind pools to fill the void.

Wind pools were intended as insurers of last resort, but their market shares have grown to levels that experts agree are unsustainable. Insurance works by spreading risk, not concentrating it.

Haley has been conspicuously absent from the insurance scene refusing to comment on the litigation while offering cheap lip service to Gene Taylor’s multi peril bill. I suspect he and the State GOP has been searching for a way to throw a bone to the people on the coast that helped elect him while working hard to preserve GOP big business bonafides with the campaign money machine that is big insurance. Continue reading “Slabbed Daily July 22-24. Lets tie a few things together”