Is the Legislature on the Right Track?

Business leaders share their thoughts on solving Louisiana’s insurance crisis

BY RICH COLLINS

Affordable housing advocate

Andreanecia Morris is not a big fan of the Louisiana Legislature’s recent $45 million spending plan to entice insurance companies to return to the state. Morris, the executive director of the nonprofit group HousingNOLA, said there’s no guarantee the law will attract stable or reputable insurers.

“Louisiana has to stop investing in private companies and entities to save its citizens,” she said in her response to the most recent New Orleans 500 email survey. “We must invest in ourselves and in our communities.”

Morris is concerned that the companies that return to write policies in the state will “cherry pick” customers with higher credit scores, higher incomes and lower risk — and she’s worried the incentive program does nothing to protect the state’s most vulnerable renters and homeowners. As an alternative, she supports plans to fortify Louisiana Citizens Property Insurance Corporation, the state’s insurer of last resort.

NEWS FROM THE TOP Each month, we ask the top business professionals featured in the New Orleans 500 to weigh in on issues impacting the New Orleans business community. Have an idea for a survey question for the New Orleans 500? Email rich@bizneworleans.com.

“One-time surplus funds could create a program that subsidizes insurance premiums for low-to-moderate income homeowners and for landlords who are providing affordable housing,” she said. “Finally, we need a long-term solution: we have to invest in improving our housing stock. Long term plans should ensure that housing is guaranteed for all and a system is in place that helps residents mitigate the next crisis — not simply survive it.”

Morris said that building science has “evolved to the point where we can strengthen homes by improving the roofing system and increase the property’s ability to withstand the next storm.” She supports implementing the 2021 International Energy Conservation Code, which establishes minimum requirements for energy-efficient buildings. Morris also urges state leaders to take advantage of federal funds from pandemic relief, the Infrastructure and Jobs Act and other sources.

“We cannot allow the missteps made with Katrina and Rita relief that left too many behind,” she said. “Those still struggling after Hurricanes Laura, Delta, Zeta and Ida need impact investment to truly recover and be able to survive the next storm.” T

To improve affordability of insurance and homeownership in the region, a multifaceted approach is necessary. As homeowner’s insurance and auto insurance are interrelated, comprehensive tort reform is required to align with other states in the area. Additionally, there is a need for a complete overhaul of the flood and pumping system management and infrastructure in New Orleans. Although the $45 million incentive fund is a positive step, we should take more assertive measures to reduce the increasing cost of reinsurance for carriers, similar to what has been done in states like Florida.

P. David Soliman, managing partner at Faubourg Private Wealth

Bell

Managing Partner

U. S. Forensic

Promote flood insurance coverage on all policies that are subsidized by the state. Flooding is an underinsured risk in Louisiana that occurs with every hurricane and can happen anywhere. FEMA reports that 30% of all flood claims occur in low-risk flood zones.

Work with carriers to instill good practices when they enter into the market in order to eliminate the need for bad faith legislation. Also increase the amount required to enter into our market to prevent further insolvencies.

HUB International hosted the first Biz Night of 2023 on January 19th at NOCHI. Guests networked while enjoying delicious food and cocktails made by NOCHI students.