Louisiana to restrict P&C policy cancellations

Louisiana Gov. Kathleen Blanco is expected to sign an emergency order that would severely restrict the ability of property/casualty and health insurers to cancel a policy within the seven-parish region that was hit hardest by Hurricane Katrina, A.M. Best reports.
Bobby Clark, a spokeswoman for the Louisiana Department of Insurance, reportedly said the insurance commissioner is working with Blanco’s office on details of the order.
A.M. Best reports the proposed order would prohibit insurers from canceling policies issued on or after Aug. 26 the day Blanco declared a state of emergency as the storm bore down on the Gulf of Mexico.
The order would suspend all laws and policy provisions relating to deadlines that were to be met on or after Aug. 26. Insurers would also be stopped from canceling or non-renewing solely based on a claim resulting from Hurricane Katrina or its aftermath; they would not be allowed to impose or levy interest, penalties and other related charges.
The order is reported to be modeled on draft rules the department unveiled Sept. 7 at a meeting held in Atlanta and attended by regulators of the affected states. More than 300 representatives of the insurance industry attended the meeting on Sept. 7.
At that time, Louisiana Insurance Commissioner J. Robert Wooley noted five Louisiana ZIP codes remained without delivery service and seven storm-damaged parishes in and around New Orleans still were off limits to insurance adjusters. “You, as an industry at this point in time, will need to be a leader, and you will be judged by how you respond,” Alabama Insurance Commissioner Walter A. Bell said at the meeting.