Without mentioning the name of the insurance company, Commissioner of Insurance Jim Donelon announced Dec. 15 that a Louisiana licensed insurer plans to acquire all policies from Access Home Insurance Co. and State National Fire Insurance Co., two insolvent homeowners insurance companies that were placed into receivership in November by the Louisiana Department of Insurance.
The takeover means that an estimated 30,000 Access Home and State National Fire customers will be able to avoid the task of finding other suitable insurance and perhaps turning to the Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort, to find coverage. Policies will automatically transfer to the acquiring insurer on the same rates and terms as Access Home and State National offered, Donelon said.
Donelon approved the transaction Dec. 15. The deal now heads to the 19th Judicial District Court for approval with a goal of finalizing the plan before the end of the year. LDI is unable to disclose the identity of the acquiring insurer until both parties agree on terms and the appropriate court approvals are obtained.
In a sign of resiliency in the Louisiana insurance market, seven private insurers expressed interest in the policies and three companies formally submitted bids to the receiver. The new insurer is acquiring the business, which represents one percent of the Louisiana homeowners insurance market, for the remaining unearned premium on each policy. The targeted effective date of the transaction will be Dec. 1, 2021.
The Louisiana Insurance Guaranty Association (LIGA) is responsible for claims from Hurricane Ida and any other events prior to Dec. 1. The new company will cover any insurance claims made on or after Dec. 1.
As policies come up for renewal each month beginning on Dec. 1, they will be re-written using the new insurer’s rates and policy forms. Customers who had been with Access Home or State National Fire for more than three years will retain their protection under Louisiana’s unique three-year consumer protection statute, which makes it difficult for companies to non-renew or change rates or coverage. These transfers will occur even if the customer’s home was damaged in Hurricane Ida and has not yet been repaired.
The new insurer will have the option not to renew policyholders who were with Access Home or State National Fire for less than three years in keeping with the limits of Louisiana’s three-year law. Those customers may need to find new coverage.
Louisiana Citizens offers coverage for any property owner who cannot get coverage from a private company, even for storm-damaged homes.
Any Access Home or State National Fire customer with questions about their coverage should contact their insurance agent or the receiver at 225-201-0107.
Any Access Home or State National Fire customer with questions about an insurance claim with a date of loss before Dec. 1 should contact LIGA at 225-277-7151 or go to https://www.laiga.org. LIGA can pay claims of up to $500,000 per policyholder.
“This deal is a win for Access Home and State National Fire customers,” Donelon said. He added that it’s a win for LIGA, which avoids responsibility for future claims. It’s a win for Louisiana Citizens, which avoids taking on new policies. In fact, it’s a win for all Louisiana property insurance policyholders, since they bear the risk of Citizens, Louisiana’s market of last resort.