Insurance policies

‘Small player’ in Louisiana market to take insurance policies from bankrupt businesses

A judge has approved a plan to buy back 30,000 policies from two companies that failed in the aftermath of Hurricane Ida.

SafePoint Insurance Co. will assume the policies of Access Home Insurance Co. and State National Fire Insurance Co., which went into receivership in November. The name of the company had remained confidential until the approval of the plans on the 19and Baton Rouge Judicial District Court.

The transaction means customers won’t have to find other insurance or turn to Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort, according to the Louisiana Department of Insurance.

Florida-based SafePoint has been licensed in Louisiana since 2015 and earned an “A” rating from financial consultant Demotech, LDI said. The company acquired the policies for the price of the unearned premium, LDI said in a press release.

SafePoint is “a small player in Louisiana,” the statement said, with just $959,035 in direct premium written by owners, or 0.05% of the residential market.

The company is expected to experience dramatic growth with the transaction. Access Home and State National Fire together had $20.6 million in direct written premiums and 1% of the home insurance market in the state.

As policies are renewed each month beginning in March 2022, they will be rewritten using SafePoint’s rates and policy forms, LDI said. Policies that renew prior to this date will continue to list Access Home or State National Fire as their insurance provider due to proper notice requirements and will be rewritten as SafePoint policies upon renewal.

Customers who were with Access Home or State National Fire for more than three years will retain their status under Louisiana’s three-year consumer protection law, making it difficult for companies not to renew or change rates or coverage on an individual basis. These transfers will take place even if the client’s home was damaged by Hurricane Ida and has not yet been repaired, LDI said.

SafePoint will have the option of not renewing policyholders who were with Access Home or State National Fire for less than three years, subject to Louisiana’s three-year law limits. Those customers may need to find new coverage when they renew, the statement said.

Seven private insurers have expressed interest in taking over the policies and three companies have submitted offers to the receiver, according to LDI.

The Louisiana Insurance Guaranty Association — a state-sponsored safety net for policyholders — is liable for any Ida claims and any other events prior to Dec. 1, the statement said. SafePoint will cover all claims made after that date.

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