Executive Says La. Safety Standards Could Help Attract Insurers

Homeowners insurance rates won’t drop anytime soon, but Louisiana has enacted safety standards since Hurricane Katrina that could help attract new insurance companies and moderate the costs, an insurance executive who met with Gov. Kathleen Blanco said recently.

Blanco held a closed-door session with several representatives of the reinsurance industry – the companies that sell insurance to insurance companies – to explore ways to stabilize the state’s insurance market and keep rates affordable after Katrina and Hurricane Rita.

The meeting’s attendees weren’t optimistic that rates would fall anytime soon in Louisiana, but Dennis Burke, vice president of the Reinsurance Association of America, said the state has been proactive to reduce its vulnerability to hurricanes.

Among the areas cited were the passage by Blanco and lawmakers of a statewide building code, the use of federal recovery dollars to strengthen and raise houses in hurricane-prone areas and a statewide push to reconstruct and repair storm-damaged wetlands.

“We think Louisiana has a great story to attract new companies,” Burke said after the meeting with Blanco at the Governor’s Mansion.

The governor said state residents need to continue to “build stronger, safer and smarter” to lessen the damage of future hurricanes and persuade new insurance companies to do business in the state. The more companies, the less the risk per company and the lower insurance rates could be, Blanco said.

A day earlier, the governor unveiled a bailout plan for the state-run insurer of last resort to help it pay off $1 billion in borrowing and avoid passing those costs onto homeowners around the state. That will require approval from the state Legislature.

Blanco has held a series of meetings with insurance industry leaders. Next, she said she wants to meet with catastrophe modelers who assess the risks of areas and advise the insurance companies. That meeting hasn’t been scheduled yet.