NAME: James Joseph Donelon
CONTACT INFORMATION FOR PUBLICATION:
Address: Post Office Box 3516, Baton Rouge, LA 70821-3516
Phone: 225-334-9811
FAX: 225-334-9812
Email: jim@jdonelon.com
Website: http://www.jdonelon.com
PARTY AFFILIATION: Republican
PROFESSION: Attorney
PRESENT EMPLOYER/POSITION (if self-employed, what type of business): Commissioner of Insurance
HIGHEST LEVEL OF EDUCATION (include graduation date): Loyola School of Law, 1968
APPLICABLE TRAINING: Former Chairman of the House Committee on Insurance, Louisiana House of Representatives; Served as Chief Deputy Commissioner of Insurance and Executive Counsel of the Louisiana Department of Insurance; and now as Commissioner of Insurance
CIVIC EXPERIENCE: On the Board of Directors of Hope Haven Boys Home, Friends Alliance for the Mentally Ill, and the Blood Center for Southeast Louisiana.
POLITICAL EXPERIENCE AND POLITICAL ORGANIZATION MEMBERSHIPS:
Prior to becoming the Commissioner of the Louisiana Department of Insurance, Jim Donelon served the Department in leadership positions as Chief Deputy Commissioner and Executive Counsel.
Jim was born in New Orleans. He is a graduate of Jesuit High School, the University of New Orleans and Loyola School of Law. In 1986, Jim became the first recipient of the Homer L. Hitt Distinguished Alumnus of the Year award for the University of New Orleans.
Commissioner Donelon retired as the State Judge Advocate for the Louisiana Army National Guard where he held the rank of Colonel and received the prestigious Legion of Merit medal among many other citations, for his contributions during his 33 years of military service.
In 1975 Jim was the elected Jefferson Parish Council Chairman and from 1982 to 2001 Jim represented Jefferson Parish in the Louisiana House of Representatives where he rose to the leadership positions of Chairman of the Committee on Insurance and Co-Chairman of the Republican Legislative Delegation. In 2001 Jim joined the staff of the Louisiana Department of Insurance.
Jim presently serves on the Board of Directors of Hope Haven Boys Home, Friends Alliance for the Mentally Ill, and the Blood Center for Southeast Louisiana.
Jim is married to the former Merilynn Boudreaux. They reside in Jefferson Parish. Jim and Merilynn are the parents of four daughters and the grandparents of two granddaughters and one grandson.
1. What should be the mix of various funding sources to finance the gap in reserves of the Citizens Property and Casualty Company (Citizens)?
The Louisiana Citizens Property Insurance Corporation (Citizens) was created in 2003 to operate the residual property insurance market, the FAIR and Coastal Plans. The Plans began operating under Citizens on January 1, 2004.
Citizens is exempt from federal income taxes, allowing it to build catastrophe reserves. Due to Hurricane Katrina, Citizens cannot operate as it was intended, solely on funding from the premiums paid by its policyholders.
The best source of funding would be a mix of policyholder premiums already in place and new money from the state general fund. Property insurers will pay $140 million in premium taxes this year alone. Some of that money could be used to help fund Citizens instead of being sent to the state general fund. Citizens could also seek any available federal funding.
2. How would you propose to relieve the Louisiana policyholders of the additional assessments to cover Citizens' shortfall resulting from Hurricanes Katrina and Rita?
Even though Hurricane Rita was the seventh costliest natural disaster in U.S. history, Citizens had adequate reinsurance to cover its losses, and therefore, did not and will not issue any assessments to cover its losses from that storm.
For losses due to Hurricane Katrina, Louisiana policyholders should be given an income tax deduction or a tax credit to offset any assessments. Since some policyholders who suffered large losses may not owe any income taxes, a direct rebate would be necessary for those individuals.
Consideration should also be given to an appropriation from the state general fund to reduce the outstanding bond-issue debt, which would lower or alleviate the need for future assessments on losses caused by Hurricane Katrina.
3. What can the Insurance Commissioner do to increase the availability of insurance to owners of rental property?
As Commissioner of Insurance, I work to address this problem on a daily basis. My staff and I meet with interested parties regularly, including multi-family dwelling property owners, government entities like HUD and LRA, and city and local officials.
Competition is the key to increasing the availability of any insurance product in Louisiana, including rental property. I am actively recruiting more insurers to Louisiana and will continue to do so in the years to come.
4. To help homeowners in southern Louisiana acquire insurance, would you promote national pools of insurance to spread the risk?
We need to create some type of insurance catastrophe pool to help home owners and business owners with their insurance rates in Louisiana. Prior to Hurricanes Katrina and Rita, the Louisiana Department of Insurance was studying the idea through its Catastrophic Wind Pool Task Force. We will continue to work on this idea with state and federal officials.
The National Association of Insurance Commissioners (NAIC), of which I am a member, also recently drafted a proposal on a National Catastrophe Insurance Plan. The plan envisions that insurance rates could be reduced/stabilized due to increased mitigation efforts such as stronger building codes and effective land use management. The federal government would act as a reinsurer to each state or multi-state fund. The plan would also consist of a state and/or regional catastrophe fund.
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