Louisiana Awards Two Incentive Grants

Only two companies applied for grants that the legislature made available as part of its financial incentive program to attract more insurance companies to the state. According to Insurance Commissioner Jim Donelon, four or five companies had been expected to apply. However, one company's application was rejected because it didn't meet the program's requirements, and two other expected applications never occurred.

Lawmakers in Louisiana had earmarked $100 million for the grants, but Donelon's office expects to award only $39 million. The remainder of the allocated funds will be returned to the state.  

"I am incredibly pleased with the response," Donelon told The Times-Picayune. "It is an overwhelming success."

Part of Donelon's positive assessment is based on the fact that the program drew attention to efforts to improve the insurance climate in Louisiana through the abolishment of the state's Insurance Rating Commission and the establishment of a statewide building code.

Donelon also believes that the program's requirements were so stiff that some insurance companies did not apply, reasoning that they would not meet the requirements.

Grant-winning companies are required to write at least 50 percent of their net written premium from property in the 37 Gulf Opportunity Zone parishes in the state. Furthermore, one-fourth of their business must come from properties currently insured by Louisiana Citizens Property Insurance Corp., according to The Times-Picayune.