FOR IMMEDIATE RELEASE

July 1, 2021

Insurance Commissioner Issues Cease and Desist Order to GeoVera Specialty Insurance Company for Non-Renewing Homeowners Policies after 2020 Hurricane Season

Insurance Commissioner Jim Donelon has ordered GeoVera Specialty Insurance Company (GeoVera) to stop non-renewing Louisiana homeowners policies in violation of state law.

In a cease and desist order issued Tuesday, Commissioner Donelon told the California surplus lines company that it was breaking Louisiana laws that say that insurers cannot non-renew policyholders who have been customers for more than three years except in very limited circumstances.

The Commissioner of Insurance has the authority to issue a wide variety of penalties to regulate insurance in the public interest as outlined in the Louisiana Insurance Code. He can refuse to renew, suspend, or revoke the certificate of authority or license of an insurer, or in lieu of a suspension or revocation, he can levy a fine of up to $1,000 for each violation up to $100,000 in aggregate.

GeoVera has 30 days to appeal the cease and desist order.

The action emanates from a consumer complaint to the Louisiana Department of Insurance (LDI) by a GeoVera customer who had filed a claim over damage from Hurricane Delta. The policyholder received a non-renewal notice from GeoVera, and the company said it was no longer offering homeowners coverage in certain zip codes.

Louisiana laws R.S. 22:1265(D) and R.S. 22:1333(C) say that homeowners insurers cannot cancel policies that have been in effect for more than three years unless a policyholder fails to pay their premium, commits fraud, files two or more non-Act of God claims within three years, or there is a “material change in risk” in the insured property or the insurer is at risk of becoming insolvent.

These three-year protection laws apply to admitted insurers as well as surplus lines insurers writing homeowners policies. They do not apply to commercial policies.

Insurers were reminded of the three-year homeowner protection laws and other policy prohibitions in dealing with policyholders affected by the 2020 storm season in Bulletin 2021-02 issued in February 2021. The bulletin specifically states that insurers cannot classify damage from the 2020 hurricanes as a “material change in risk” to trigger cancellations or non-renewals as policyholders work to rebuild.

GeoVera had a direct written premium of $33,675,411, which represented 1.64% of the Louisiana homeowners insurance market in 2020.

The Louisiana Department of Insurance fully investigates every consumer complaint and reminds all policyholders of the importance of reading and reviewing their insurance documents.

Policyholders can file complaints about their insurer, agent, or other matter by going to www.ldi.la.gov/complaints or by calling 1-800-259-5300 and selecting option 3.

A copy of the order is available here.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.