Baton Rouge, La. – The governor proposed a $1 billion plan Monday to ease the post- hurricane insurance burden on Louisiana homeowners by sending them refund checks to cover recent rate increases.
Gov. Kathleen Blanco’s plan requires legislative approval and a change to the state constitution, in part because some of the money would be raised by selling off what remains of Louisiana’s share of the 1998 nationwide tobacco settlement.
The plan calls for the state to essentially refund the rate increases, averaging 15 percent, that private insurance companies imposed on the state’s 1 million policyholders after Hurricanes Katrina and Rita.
The increases were imposed to offset losses suffered by the quasi-state program that provides coverage to people who cannot get it elsewhere. Private companies help support the program.
Republican lawmakers said Blanco’s plan would needlessly put the state further in debt and relied too heavily on tobacco-settlement bonds rather than money already in the state’s $26 billion budget.
