Louisiana To Charge Insurers $100M To Cover Two Insolvent Carriers

Insurance companies in Louisiana will be assessed $100 million – and likely more in the future – to pay the claims of two failed property insurers who went belly up in Hurricane Ida’s aftermath.

But the cost of spotting the insolvent insurers will ultimately fall on taxpayers, after insurance companies recoup the dollars from the state through a series of premium tax credits.

The board of the Louisiana Insurance Guaranty Association, a state-sponsored safety net for policyholders, voted Tuesday – for the first time since 2004 – to use its authority to charge admitted insurers 1% of their net written premiums from last year to help fill its coffers.

The guaranty fund, known as LIGA, is responsible for covering claims for policyholders whose insurers go insolvent.

It promises up to $500,000 in payments for unpaid claims and $10,000 for premium refunds.