Citizens Property Insurance Corporation Depopulation Information
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Through the depopulation process new or existing private insurance companies can assume policies currently covered by Louisiana Citizens Property Insurance Corporation (Louisiana Citizens) and renew their coverage on the Cajun Underwriters Insurance Company policy forms.
Through this process, Louisiana Citizens can transfer policies back to the private insurance market. This benefits all property owners by preventing or reducing assessments charged to all property insurance consumers.
TIMELINE AND REQUIREMENTS FOR ASSUMPTION
The assumption date for this year is December 1. This is the date when Cajun Underwriters Insurance Company will assume the approved policies from Louisiana Citizens Property Insurance Corporation. The procedures and dates to effect this assumption are incorporated into the steps below:
- Step 1. Cajun Underwriters may request, for purposes of depopulation and subject to an appropriate confidentiality agreement, an initial data file of policies currently in force and eligible for assumption through Louisiana Citizens. Using this data file, Cajun Underwriters will identify those policies it wishes to take out.
- Step 2. After selection of the “take out” policies, in accordance with LSA-R.S. 22:1474, Cajun Underwriters must secure approval from the current agent to assume the business. Between September 1st and October 31st, Cajun Underwriters will work with agents to seek final agent approval on individual policies. To facilitate the agent authorization process, Citizens’ web portal will be used, which can be accessed through the Louisiana Citizens’ website, www.lacitizens.com. Insurers will access the portal through a secure log in and ‘request’ the policies they wish to assume. The portal will be made available to insurers on October 2nd. This portal will be available to agents on October 31st. Agents can access the portal and authorize one company to assume each of their policies. While agents may represent multiple depopulation insurers they will not authorize an individual policy to more than one depopulation company. Agents should not authorize any policies which do not meet the insurer’s underwriting standards and should remain with Citizens.
- Step 3. Insurers must have their companies’ Form A and Rates and Regulations approved and be approved to do business in Louisiana by the Louisiana Department of Insurance, on or before October 1st.
- Step 4. Access to the portal to make changes will be terminated on October 31st – 14 (fourteen) days prior to the policies being transferred to the insurer. LCPIC will examine the data, check to remove any policies that are not in force, and mark the producer approved policies for take-out with the appropriate depopulation company. This list will be sent to the companies on or around November 20th.
- Step 5. The assuming insurer shall mail a certificate of assumption to each assumed policyholder confirming the assumption. This certificate shall be mailed between November 25th and November 30th, and the agent should be copied. The certificate needs prior approval of both the Louisiana Department of Insurance and Louisiana Citizens. A separate letter to the insured and producer will also be mailed from Louisiana Citizens, informing them of the assumption. On November 20th Louisiana Citizens will issue Assumption Agreements to the depopulation companies covering the selected policies. The assumption agreement must be reviewed and approved by the Louisiana Department of Insurance. The Assumption Agreements will be effective December 1st. Depopulation insurers will be responsible for the handling of losses on their assumed policies from December 1st. Louisiana Citizens will continue to renew any assumed policies on their paper until March 1st when depopulation carriers will provide replacement policies on their paper.
- Step 6. Any policyholder wishing to ‘opt out’ of the assumption and remain with Louisiana Citizens can do so till February 28th. This gives the policyholder ninety (90) days after their policy has been assumed. The producer shall complete and sign the Request to Continue Coverage Form available on our website to effect a policyholder opt out.
Frequently Asked Questions
1. What are the key points for an agent to consider?
Agents should have discussions with depopulation companies regarding the following:
- Financial stability of the depopulation insurers
- How coverage forms and rates will compare with Louisiana Citizens.
- A key issue in handling renewals will be insurance to value – producers should evaluate any impact of ITV on renewal premiums
- Other products the depopulation insurer will provide.
- Review of business methods of the depopulation carrier(s)
- Acceptable agent contracts and compensation
- When the depopulation insurer begins to write policies on their paper it is expected they will handle these conversions as renewals; however, this should be confirmed with the depopulation insurer
2. What are the key dates that concern the agent?
Between September 1 and November 16, the private market companies will ‘request’ policies on the new web portal. Effective October 2, agents can access the web portal and authorize each policy to a private market company for assumption. Agents will also have access to the portal till October 31st.
3. What id and password should be used to access the Depopulation portal?
LCPIC has simplified the process for agencies to access the Depopulation portal. The Agency Portal ID and Password that is used to access the Agency portal should be used to access the Depopulation portal. From the Agency portal, select the Depopulation Portal from the Quick Links menu for easy access to the Depopulation portal. There is no need to register to obtain a separate id and password for Depopulation.
4. How does an agent authorize a policy on the web portal?
The Agency portal will exhibit all the agents’ policies, and the private market companies that have requested each policy. The agent can only pick one company for each policy. If only one company has requested a policy, the producer needs to pick the company in the appropriate field, authorizing the assumption. If no company is picked, the policy will stay with Citizens.
5. What happens if an agent does not authorize assumption of a policy?
If an agent does not approve a policy for assumption, it will remain with Citizens.
6. Will the private market company provide the same coverage as Citizens?
Coverage should generally be the same as Louisiana Citizens, but there may be some differences. Agents should review the take out companies’ forms approved by the Louisiana Department of Insurance and make sure that coverage is appropriate for policyholders.
7. How will the private market companies’ rates differ from those of Citizens?
The companies involved in the depopulation process have generally agreed to provide the same or better rates as Citizens. However, this may vary by company and by policy, and should be confirmed with the company. Agents should review the private market companies’ rate structure as approved by the Louisiana Department of Insurance.
8. Will the Agent be affected if a policy is assumed?
The current agent will remain the agent of record on all policies assumed by a depopulation company.
9. How will policy changes be handled?
Citizens will continue to maintain the policy until expiration. Citizens will also renew assumed policies until February 28. The private market company will renew the policy on their paper starting March 1.
10. How will losses be handled?
All losses on assumed policies will be handled by the private market companies from December 1. Depopulation carriers will have access to their policies from December 1. Losses occurring prior to December 1 will be handled by Citizens.
11. Will there be additional depopulations after this round?
Future depopulation rounds are planned to occur at least once every year.
12. Will the private market companies be writing policies in the voluntary market?
Several depopulation companies are writing in the voluntary market.
13. Will policyholders be notified?
Prior to December 1 producers and policyholders will be formally notified of the assumption by both the depopulation insurer and Louisiana Citizens.
14. Can a policyholder opt out of the assumption?
Yes, the policyholder can opt out of the assumption, till February 28th. The form (Request to Continue Coverage) is available on the Citizens website. If a policyholder opts out of the assumption and chooses to continue their coverage with Citizens, the policy will be ‘unassumed’ and Citizens will take the policy back