Current through Register Vol. 50, No. 3, March 20, 2024
A. Minimum
Solvency Requirements. Grants shall be made only to property insurers who
initially satisfy and thereafter maintain the following minimum solvency
requirements:
1. capital and surplus in an
amount not less than $10,000,000;
2. a property insurer with a financial
strength rating that meets the following requirements:
a. AM Best Company "B+" or better;
or
b. Demotech, Inc. "A" or better;
or
c. AM Best Company "A" or better
for licensed surplus lines insurers.
NOTE: Property insurers rated by more than one rating company
need only meet one of the rating requirements.
3. risk-based capital ratio of 400 percent at
the initial grant award, which shall be maintained during the property
insurer's participation in the Incentive Program; and
4. sufficient reinsurance to demonstrate that
its reinsurance program is sufficient for the amount of business to be written
pursuant to the Incentive Program.
B. Certificate of Authority
1. A property insurer must have an existing
certificate of authority in Louisiana for the line or lines of insurance that
the property insurer applicant will write pursuant to the Incentive Program or
documentation that an application for such licensure has been filed with the
Company Licensing Division of the department contemporaneous with the filing of
the grant application.
C.
Satisfactory Prior Experience
1. Grants shall
be made only to property insurers with satisfactory prior experience in writing
property insurance or to new property insurers whose management has
satisfactory experience in property insurance. The grant application shall
accurately disclose the prior experience of property insurers and their
management. The commissioner may request additional information from the
applicant property insurer and conduct such investigation of prior experience
as the commissioner deems appropriate.
2. The commissioner shall determine whether
an applicant property insurer has adequate or satisfactory prior
experience.
D. Other
Requirements
1. Applicant shall maintain
premium to surplus ratio, net of reinsurance, no greater than 3 to 1.
2. Applicant shall not insure more than 10
percent of its surplus in any one risk pursuant to
R.S.
22:573.
3. Applicant shall maintain gross premium to
surplus ratio no greater than 8 to 1.
4. Without prior approval of the
commissioner, applicant shall not write more than 15 percent of the net written
premiums in any one parish.
5.
Applicant shall make a commitment of capital of not less than two million
dollars to write property insurance in this state that complies with the
requirements of
R.S.
22:2369 and
§4821 of Emergency
Rule
48 Grants from the Incentive
Program Fund shall match the newly allocated property insurer capital funds at
a ratio of one dollar of allocated property insurer capital funds for each
dollar of state capital grant funds.
E. Notwithstanding any provision of law,
regulation or rule to the contrary, the following are ineligible to receive any
portion of funds from the Incentive Program Fund:
1. Any insurance company or property insurer
with an officer, director, or controlling shareholder who was an officer,
director, or controlling shareholder of an insurance company or property
insurer licensed in Louisiana that filed for bankruptcy or was declared
insolvent.
2. Any insurance company
or property insurer whose parent company controlled all or part of an insurance
company or property insurer licensed in Louisiana that filed for bankruptcy or
was declared insolvent.
AUTHORITY NOTE:
Promulgated in accordance with Act No. 1 of the 2023 Extraordinary Session and
Act No. 2 of the 2023 Extraordinary Session,
R.S.
22:11,
22:2361 et seq., and the
Administrative Procedure Act,
R.S.
49:950 et
seq.
