The Louisiana Citizens Property Insurance Corp. is ending an assessment supporting bonds early because it had enough money to pay off the bonds.
The corporation, which is a state-regulated nonprofit, will stop the assessment in April. Originally, the assessment was planned to continue until all the bonds it supports had matured. The assessment has gone toward paying off bonds for debt the corporation incurred for hurricanes Katrina and Rita.
Everyone with residential and commercial property insurance policies in the state have had to pay the assessment on their rates.
The corporation had collected sufficient assessments by the end of December to cover all remaining debt service obligations, said Adam Bourgeois, senior accountant with the LCPIC.
The LCPIC board of directors voted in early January to end a 1.36% assessment it makes on all residential and commercial property insurance policies in the state in April.
"When Commissioner [Timothy] Temple took office and became chair of the Citizens Board of Directors, he encouraged our staff to find innovative ways for Louisiana Citizens to operate more efficiently and find savings for policyholders," said Louisiana Citizens CEO Richard Newberry. "Our team identified this opportunity and brought it to the board for approval at today's meeting."
There are three supported bonds outstanding with maturities in June of this year and 2026. The original issue sizes were $20.3 million (546456EB6), $57.7 million (546456EF7), and $35 million (546456EE0).
Louisiana Citizens is an insurance of last resort and is state mandated to be more costly than private property insurance companies.
