La. Admin. Code tit. 37 § XIII-18915

Current through Register Vol. 50, No. 9, September 20, 2024

Section XIII-18915 - Qualifications for Applying for Grant Funds

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 §18923 of Regulation 125. 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.

La. Admin. Code tit. 37, § XIII-18915

Promulgated by the Department of Insurance, Office of the Commissioner, LR 49272 (2/1/2023), Amended LR 491088 (6/1/2023).

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.