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March 7, 2007

Louisiana Citizens Insurance Tax Credit

Since Hurricanes Katrina and Rita struck the gulf coast of Louisiana an 2005, the Louisiana Citizens FAIR Plan and Louisiana Citizens Coastal Plan both suffered claims that were larger than their reserves could handle. These two insurance carriers are actually quasi-state run entities in that they are owned by the state but managed separately from the state's general budget.

To settle the billion dollars in claims, the state borrowed money so that policy holders could be pair. Now the issue is how to pay back that loan.

Built into the legislation that created the plans is an assessment fee that must be paid by all insurance policy holders, regardless of which company they actually have their insurance with.

The state is also able to declare an emergency and collect an emergency assessment along with the regular assessment until the loan is paid down.

With the unexpected surplus in the year-ending 2007 state fiscal budget, Governor Kathleen Blanco was able to convince the state legislator to pass the bill recommended by the governor to refund the amount of the assessments policy holders have paid since the date of the storms.

The assessments can be listed as a credit on your 2006 state tax returns.

The State Department of Revenue and Taxation has several web pages available to explain the credit and how to claim it.

Posted by Westley Annis at 11:16 PM | Comments (0) | TrackBack