Longtime Louisiana Insurance Commissioner Jim Donelon announced Tuesday he will not seek re-election in October. Donelon made the announcement while touting the success of the Insure Louisiana Incentive Program.

Donelon said nine insurers have applied for the program, which was granted $45 million in funding in an “overwhelming bipartisan manner” during an extraordinary special session held earlier this year.

Through the program, insurance companies are financially incentivized to write new business in Louisiana to offset the insurance crisis that Louisiana has faced in the 2020 Hurricanes Laura and Delta.

“It was absolutely vital to get this program up and running so we can provide relief to Louisiana residents facing the lack of options in the market and the major cost increases at Louisiana Citizens,” he said.

Round one of the application period closed on March 10. The total amount of funding requested by the nine insurance companies totals $62 million. This is $17 million over what the program has available to distribute.

Donelon said state Rep. Mike Huval, chairman of the House Insurance Committee, will be offering legislation in the upcoming special session to appropriate additional funding to cover the difference.

Insures that have applied for the program include:

• Safe Point Insurance Company – $10 million

• Constitution Insurance Company – $10 million

• Applied Underwriters – $10 million

• Sure Choice Underwriters Reciprocal Exchange – $10 million

• Allied Trust Insurance Company – $ 6.5 million

• Cajun Underwriters Reciprocal Exchange – $5 million

• Elevate Reciprocal Exchange – $5 million

• Gulf States Insurance Company – $3.6 million

• Safe Port Insurance Company – $2 million

Insurers participating in the program are required to match their grant dollar for dollar. Additionally, insurers must write four times the grant amount in new premiums. If all $45 million dollars in grants are awarded, $180 million in new policies will be written.

Approved companies are contractually obligated to maintain coverage over a five-year period, and will be subject to solvency monitoring, which includes processes such as monthly reporting, in-depth reinsurance program reviews and premium limits in each parish.

The LDI is still in the process of reviewing all nine applications, Donelon said.

“Because of the complex nature of the program and strict standards insurers must meet to receive a grant, I do expect there will be several questions for these applicants to address before we can recommend them for approval to the legislative committee on the budget,” he said.

These recommendations will be presented to the committee either at the meeting this Friday or at a separate meeting in the near future, Donelon said.

After meeting with the committee, the Louisiana Department of Insurance will be allowed to enter cooperative endeavor agreements with the companies and issue funding to the approved insurers.

Donelon said he predicts these companies will be able to write new business as soon as April. Participating insurers will write this business in areas that were most affected by the policy cancellations — the 37 GO Zone parishes.

This process includes taking policies off of Louisiana Citizens. Huval said about  10,000 Citizens policyholders per month are experiencing suffocating premium increases that are required by law — 63% increases for residential policies and 76% increase for commercial policies.

After speaking to Louisiana Citizens CEO Richard Newberry,  Donelon said he can confirm that round 17 of Citizens’ depopulation process will launch once insurers begin writing new business

The LDI’s focus in the upcoming legislative session will be the “long-term” fix, the Louisiana Fortify Homes Program. This program will offer grants to qualifying homeowners that will allow them to fortify their homes to mitigate future disaster damage, subsequently decreasing residential property insurance costs.

On the heels of the Insure Incentive Program’s success, Donelon announced he will not be seeking re-election this fall. He attributed two motivators for this decision: removing personal politics from the upcoming legislative session and the desire to retire after a 50-year career.

“Thank you to the people of the state of Louisiana. It has been one of the greatest privileges, honors and pleasures of my life to serve the people of our state in various roles, and I just want to give back to them my assurance that they have gotten the best efforts that I have available on their behalf.”