re: Good News: More Insurers coming to LA. Bad News: Most of them suck

quote:

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Several of the new companies share another similarity with the failed firms: They use an affiliate model that allows them to farm out many functions – and premium dollars – to less-regulated affiliates, an arrangement that has raised concerns among some regulators and some observers of the industry.

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These companies are formed to extract premiums from Louisiana citizens and that's about it. They gladly gobble up risky policies from Citizens, ship the premiums off to out of state investors via affiliates, and then when a storm hits they are shocked to discover they have not purchased enough re-insurance to cover claims, declare bankruptcy and leave the mess for LIGA. Rinse and repeat after every major storm.

Donelon gave them millions to do this. Temple is making it easier for them to raise premiums and divert even more money to the affiliates. It's a joke.