READER: Pivotal moment in La. for affordable insurance

Dear Editor,

Currently, we have two critical insurance issues on the national level that will negatively impact Louisiana citizens. The National Flood Insurance Program (NFIP) crisis and the possible elimination of reinsurance tax deductions.

In Louisiana, we are all knowledgeable of the NFIP problems with the threat of rapidly increasing premiums. However, this is a not only a coastal issue but a national one, as all 50 states participate in the program. Properties that have never flooded will see an increase. These same insurance holders do not realize that their premiums could increase by 4,000 percent.

I applaud Congress for taking another look at the NFIP increases but we need to take a long-term approach instead of a Band-Aid one. One of the main program myths is the continual red bottom line. According to the Federal Emergency Management Agency’s published data for the last 35 years, NFIP premium income exceeded their cost by $6.2 billion. Our national leaders need to look further into the data that states the NFIP is a not a financially sound program. The surpluses need to stay in the NFIP and operate as an insurance program.

The second threat to Louisiana citizens are bills filed by U.S. Rep. Richard Neal (D-Ma.) and U.S. Sen. Bob Menendez (D-NJ) that would deny a tax deduction for certain reinsurance premiums. Reinsurance is essential to and used by almost all insurance companies as it reduces loss by spreading risk. Removal of these tax deductions will result in more expensive insurance coverage for all consumers.

A tax raise on reinsurance mainly affects companies that insure against catastrophes. This will particularly impact states like Louisiana, which, as we are all well aware, is highly susceptible to hurricanes. While many Louisiana homeowners and business owners are already having trouble affording insurance, this proposed legislation would further exacerbate the problem.

Due to the unique challenges Louisiana businesses and homeowners already face with securing property insurance policies, I urge our national leaders to seriously consider the devastating effects of unfair increased flood insurance rates as well as disrupting the reinsurance market.

Billy Ward,

President, Louisiana Home Builders Association