Seen in Insurance Journal:
Under the initial phase of the program, qualified insurers may apply for grants of $2 million to $10 million. The insurers must commit the same amount in new capital and use that money and the matching grant to write new property insurance policies.
Insurers must write at least $2 in new premiums for each dollar in capital, under the program. However, Donelon has said insurers usually write $3 in premiums for every dollar in capital, which means the program could generate $400 million or more in new property insurance coverage.
The program requires that 50 percent of the new coverage be sold in the 37 parishes affected by hurricanes Katirna and Rita. Twenty-five percent of the new premiums must come from policyholders whose property is insured by the Louisiana Citizens Property Insurance Corp., the state-run property insurer of last resort.
It certainly seems like a more intriguing idea than, oh say, creating an underfunded state-run reinsurer and then browbeating insurers for failing to reduce rates because of the hypothetical coverage available from the aforementioned underfunded reinsurer.