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Louisiana Commissioner of Insurance Jim Donelon directed Horace Mann Insurance Companies of Springfield, Ill., to stop canceling or nonrenewing homeowners policies in 23 parishes and reinstate any policies that have been cancelled since the Illinois-based insurer began the practice in July. According to the Louisiana Department of Insurance, Donelon further directed Horace Mann to give him 30 days advance written notice of any future plans to cancel or nonrenew Louisiana homeowners policies.

At issue are Louisiana consumer protection provisions in R.S. 22:635.3 and 636.2 that protect policyholders from the cancellation or nonrenewal of a homeowners policy that has been in effect for three years or longer. LDI said Horace Mann based its actions on what it alleged was a “material change in the risk” due to a number of storm-related factors including improperly maintained levees; coastal erosion; damage to barrier islands’ vacant lots; rising health risks; increased liability exposure caused by house evacuees; and the large volume of hurricane-related trash and debris. Donelon advised Horace Mann that the “material change in the risk” must relate to the property being insured, not the surrounding levees, barrier islands and other factors listed.

Horace Mann sells homeowners policies primarily to educators. It insures some 10,000 Louisiana homes with total written premium of around $10 million annually.

Parishes affected: Acadia, Ascension, Assumption, Calcasieu, Cameron, Iberia, Iberville, Jefferson, Jefferson Davis, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne and Vermilion.

Source: Louisiana Department of Insurance