Blanco aims to send out insurance rate relief checks

Gov. Kathleen Blanco on Monday announced a plan to ease homeowners’ post-hurricane insurance burden by sending them state checks next year with money raised by selling off what remains of the 1998 tobacco settlement.
Blanco’s plan would require approval from the Legislature, possibly in a special session later this year, plus statewide voter approval of a change to the state constitution.
The governor said she aimed to essentially refund the rate hikes between 10 percent and 15 percent that insurance companies imposed to offset storm-related losses sustained by the Citizens Property Insurance Corp., the quasi-state insurance firm for those who can’t afford coverage elsewhere.
“We need insurance rate relief, and we need it now,” Blanco said at a morning news conference in the Capitol.
Blanco said the state Department of Revenue would collect information on policyholders’ rate increases from insurance companies, then send out checks sometime next year. A homeowner who pays $1,000 per year for property insurance would receive between $100 and $150 from the state, according to Blanco’s plan.
Louisiana is one of 46 states that settled lawsuits with tobacco companies in 1998 in return for installments of money. The $206 billion settlement requires cigarette companies to make the payments as reimbursement for health care costs related to tobacco use. Louisiana was supposed to get more than $4.6 billion over 25 years.
In 2001, the state sold 60 percent of its share for $1.1 billion to get upfront cash rather than risk tobacco companies going out of business later and not paying their bills.