Ideas for Reforming Louisiana Citizens Property Insurance Corp.
Government-run insurer needs changes, but wrong reforms could make things worse
Louisiana's Commission on Streamlining Government has recommended phasing out the Louisiana Citizens Property Insurance Corporation. The proposal--still in its embryonic stages--would recreate the Joint Underwriting Association (JUA) structure that existed before 2003. To do this, the commission has recommended removing Citizens from state government and creating an entity outside of government that would take on its responsibilities.
In this Web Memo--produced jointly by the Heartland Institute and the Pelican Institute for Public Policy--Eli Lehrer, a Heartland Institute senior fellow and director of its Center on Risk, Regulation, and Markets, explains the proposal and offers guidance for policymakers as they consider various proposals for Citizens' future.
Following an introduction that explains the basic facts about "markets of last resort" (entities like Citizens) and what the proposal would do to Louisiana's existing market, the paper introduces four fundamental principles policymakers should keep in mind as they consider the potential of overhauling Citizens.
