Louisiana gets extra reinsurance for Citizens to cover policies of failed insurers
Louisiana’s Department of Insurance said that it has arranged extra reinsurance to secure coverage for policyholders affected by the failure of a number of coastal property underwriters, giving more time for the policies to be placed elsewhere, or assumed by Louisiana Citizens.
The reinsurance has been arranged so that policyholders of insurers Lighthouse Excalibur, Maison and Southern Fidelity will have an additional 60 days to get their insurance arrangements placed elsewhere, or from Citizens itself.
Having originally been scheduled for cancellation from June 22nd, Louisiana Insurance Commissioner Jim Donelon said the policy cancellation date for failed insurer Lighthouse Excalibur has been extended to June 30th now, following the Louisiana Department of Insurance’s action to secure additional reinsurance.
Lighthouse Excalibur and Maison property insurance policies will now be cancelled on June 30th, while Southern Fidelity policies will be cancelled on July 15th, but coverage will now be maintained through the 60 day term thanks to the reinsurance arrangement, it appears.
Policyholders will now receive coverage from Louisiana Citizens for any claims occurring between their cancellation date and the date their agent binds a new policy with Citizens, if that date is no later than 60 days following the original policy’s cancellation.
Suggesting Citizens is the beneficiary of an additional reinsurance arrangement, secured just to ensure it has the additional claims paying capacity through this period of transition for policyholders.
What it effectively means is that Citizens will now provide coverage for Lighthouse Excalibur and Maison policyholders from June 30th through August 28th, and for Southern Fidelity policyholders from July 15th through September 13th.
“Louisiana agents have been working tirelessly to place policyholders with insurers following the announcement that three insurers are canceling policies in the coming weeks,” Commissioner Donelon said. “This initiative by Citizens provides much-needed relief and time for agents and policyholders to get a new policy in place while maintaining coverage during hurricane season.”
As a reminder, Louisiana Citizens augmented its reinsurance arrangements with another catastrophe bond this year, having secured the new Catahoula II Re Pte. Ltd. (Series 2022-1) cat bond transaction to provide it $175 million of capital markets backed reinsurance
