Commissioner Donelon Reminds Property Insurance Policyholders of Deadline to Claim 2009 Citizens Rebates

Citizens Depopulation Sees Highest Percentage of Policies Transferred to Private Sector in Five Years

WASHINGTON, D.C. – December 11, 2013 – (RealEstateRama) — Insurance Commissioner Jim Donelon held a press conference this morning to announce a milestone reached by Louisiana Citizens Property Insurance Corporation (Citizens) and also reminded property insurance policyholders that the clock is ticking on the deadline to claim a rebate for the Citizens Assessment. After December 31, 2013, policyholders will no longer be able to claim the 2009 Citizens assessment rebate. Nearly $59 million in rebates for 2009 remains unclaimed by property owners in Louisiana.

“At the end of each year, I remind homeowners that this money is available and waiting to be claimed,” said Commissioner Donelon. “Right now, about 53 percent of the available money for 2009 remains unclaimed. Many homeowners simply don’t know that they are eligible for these rebates while others may not be aware of how simple the process is to claim the money that’s owed to them.”

All property insurance policyholders in Louisiana – whether they are with Citizens or any other insurer – are assessed about four percent of their insurance premium which is paid to Citizens. In 2013 the assessment was 3.74 percent. This assessment is legislatively mandated to retire the Citizens bonds issued to finish paying Katrina claims.

Property owners can currently claim rebates for 2009, 2010, 2011, 2012 and 2013. “Nearly $300 million, or 62 percent, of the total rebate amount available for 2009 through 2013 is unclaimed,” said Commissioner Donelon. “To date nearly 60 percent of all funds, or half a billion dollars, available have gone unclaimed which is far too much for our property owners to leave on the table.”

Claiming the rebate can be done by filling out the Louisiana Department of Revenue R-540INS tax form for the years that the Citizens Assessment was paid. The form asks for the following information: name, address, social security number, insurance company, policy number and the refund amount, which is found on the policy’s declaration page. A copy of the declaration page showing the assessment has been paid must be attached to the form being submitted.

Policyholders can also visit www.revenue.louisiana.gov/fileonline, register as a user, and follow the links to Louisiana Department of Revenue’s web application designed to help individuals claim their Citizens rebate. Policyholders can choose to receive the rebate by direct deposit, paper check or a pre-loaded debit card. Individual policyholders may also claim the rebate by amending a prior-year tax return.

Businesses may claim the Citizens Rebate by filing out the Department of Revenue Form R-620INS or by filing a current-year or amended tax return. A copy of the insurance policy declaration page showing proof of the assessment amount must be attached to any claim form.

Below is a chart showing the available unclaimed rebate amounts listed by year:

Louisiana Department of Insurance All Citizens Assessments Unclaimed
as of December 3, 2013

* Regular Assessment, all other years include the Louisiana Fair Plan Emergency Assessment.
**Assessments for 2013 are estimated for entire year and are still being collected through the end of the year.

The tax forms are available from the Department of Insurance home page at www.ldi.la.gov by clicking on the newsreel link, “Louisiana Citizens Insurance Rebate.”

Citizens Depopulation Sees Highest Percentage of Policies Transferred to Private Sector in Five Years

Commissioner Donelon also announced that Citizens’ total policy count is dropping below 95,000 personal and commercial policies following the latest round of the Citizens Depopulation Program. Donelon said Citizens’ homeowners market share is predicted to drop to an estimated 2.7 percent, ranking it ninth in market share size in Louisiana at year’s end.

Each year Citizens opens its books of business during depopulation and offers its policies to the voluntary market. Companies are allowed to review the policies and select those that they would like to pull out of Citizens and write on their own paper.

Over the seven rounds of the Citizens Depopulation Program, Citizens has reduced its policy count by a total of 88,805, which represents a 51 percent decrease from the all-time high of 174,000 policies. In this round, Citizens reports 14,268 residential (personal lines) policies are being transferred to the private insurance market from Louisiana’s property insurer of last resort through three companies.

Citizens policy count will drop to below 90,000 residential policies and to approximately 93,000 total policies, including commercial.

According to Commissioner Donelon, those whose policies are transferred to the private insurance market will benefit by now having lower rates since as the insurer of last resort Citizens’ rates are required by law to be the highest in each parish.

“What is important to realize is that it’s not just Citizens’ policyholders who benefit from depopulation,” said Commissioner Donelon.  “All Louisiana property owners benefit from this reduction of Citizens policies as it reduces the need for future assessments charged to property insurance consumers in the event of another Katrina-level event.”

This success in the Citizens Depopulation Program indicates ongoing and significant improvement in the recovery of the Louisiana property insurance market post-Hurricanes Katrina and Rita in 2005.

Citizens’ market share peaked at 9.8 percent in 2008, which ranked it the third largest homeowners group in Louisiana at that time. Its market share dropped to 6.4 percent in 2009 to 5.3 percent in 2010 and to 4.1 percent in 2011. It reduced further in 2012 to 3.0 percent. Citizens homeowners market share is now predicted to have dropped to an estimated 2.7 percent, ranking it ninth in market share size in Louisiana at year’s end.

According to Commissioner Donelon, Louisiana has 18 new carrier groups in the state since Hurricanes Katrina and Rita, giving homeowners a broader range of options for insurance. The Citizens Depopulation Program has utilized 12 of those companies writing in our homeowners market.

The three companies successfully making offers to write homeowners policies currently written by Citizens are Access Home Insurance Co., Maison Insurance Co. and Lighthouse Property Insurance Corp. All three companies have previously participated in Citizens’ depopulation process. They also generally offer the same coverage as Citizens or better coverage and for a lower rate. Altogether, 40,419 unique policies were requested by these companies and 14,268 policies were authorized to be moved. Citizens’ policyholders who authorized their policies moved to another company have 60 days to decide whether they prefer to remain with Citizens beginning on the assumption date of December 1, 2013. In prior rounds, typically less than two percent of Citizens policyholders opted out and chose to remain with Citizens.

In the six previous rounds of Citizens depopulation, Citizens saw the following reductions in policy counts:  round one – 26,595 policies on June 1, 2008, round two – 13,343 policies on December 1, 2008, round three – 3,368 policies on April 1, 2009, round four – 13,466 policies on December 1, 2010, round five – 10,890 policies on December 1, 2011 and round six – 6,877 policies on December 1, 2012.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.