Citizens' statutory ten-percent penalty is suspended until the end of 2027 — and it reached commercial policies
Citizens' statutory ten-percent penalty is suspended until the end of 2027 — and it reached commercial policies
2026-09-10 · Louisiana · Legislation
What happened. Louisiana Citizens is the insurer of last resort, and by statute it is required to be expensive: it must price above the private market so that it does not compete with it. That requirement is currently switched off, and it is switched off for a defined period that ends soon enough to matter to a board's 2028 budget.
The suspension
2024 Senate Bill 113 rewrote R.S. 22:2303(D)(1). Its effect, shown with the bill's own deletion and addition:
“D.(1) Notwithstanding the provisions of Paragraph (A)(1) of this Section,
until August 15, 2010,December 31, 2027, subject to the provisions of Paragraph (3) of this Subsection, rates for policies issued by the corporation shallchargenot exceed the higher of (a) actuarially justified rates or (b) the highest rates charged among assessable insurers that have a minimum of two percent of the total direct written premium in each respective parish for that line of business in the preceding year…”
The statutory changes to (D)(1) took effect January 1, 2025, and the relief runs to December 31, 2027.1
Why it exists, in the Legislature's words
“…the people of Louisiana who secure insurance coverage through Louisiana Citizens Property Insurance Corporation due to the absence of a private market alternative are paying ten percent above the actuarially justified rate required to insure their homes.”
That is the problem the suspension addresses: in parishes where the private market has withdrawn, the last-resort premium was carrying a penalty for a choice nobody had.
And it reached the commercial book
The statute speaks to “rates for policies issued by the corporation” without limiting to residential, and Citizens implemented it that way. Its commercial-lines rate notice CR-7A, effective January 1, 2025, states:
“The policy premium will be divided by a factor of 1.10 for all FAIR plan policies.”
“The policy premium will be divided by a factor of 1.10 for all Coastal plan policies.”
The commercial book is where an association master policy sits. So a Louisiana association that had to place with Citizens was, for policies effective from January 1, 2025, not paying the statutory ten-percent loading.2
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Related Louisiana HOA Topics
- SB 113, 2024 Regular Session — enrolled text, amending R.S. 22:2303(D) and the claims-penalty statutes ↩
- Louisiana Citizens commercial lines rate notice CR-7A, effective January 1, 2025 ↩
- Louisiana Citizens commercial lines rate notice CR-7A, effective November 1, 2025 ↩
- La. R.S. 22:1973 — “Repealed by Acts 2024, No. 3, §2, eff. July 1, 2024.” ↩
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