“(I) have spent almost 50 years serving the public of Louisiana,” Donelon, 78, said Tuesday. “I want to enjoy the remaining years of my life with my family and hopefully some new hobbies.”

Donelon’s surprise announcement comes a month after lawmakers approved of allocating $45 million to an incentive program designed to entice more insurers to Louisiana. Over the past few years, a dozen homeowners insurance companies fled the state and another dozen went insolvent following hurricanes Delta, Laura, Zeta and Ida. The storms’ destruction generated a combined 800,000 insurance claims totaling $22 billion.

As a result, thousands of residents have been forced to turn to Louisiana Citizens Property Insurance Corporation — the state-run insurer, which is the most expensive option. Currently the corporation has 120,000 residential policies — compared to 41,000 policies in 2021 — and the average annual property insurance premium has soared to $4,400. Nationally, the average annual premium for property insurance in 2019 was $1,272, according to the most recent data from the Insurance Information Institute.

Under the state’s incentive program, qualified companies will be awarded grants between $2 million and $10 million. In return, those insurers must provide 100% matching funds for the grant. In addition, the new premiums that are required to be written by each company are at least two times that total amount.

Donelon announced Tuesday that nine companies have applied to the program. In total, the companies are asking for $61 million in grants to do business. Donelon said if all companies are approved, they would receive lesser amounts than requested in order to match the current $45 million available, unless lawmakers expand funds allocated to the program.

The state’s insurance department is currently reviewing applications. But if the entirety of the program’s funds are allocated, it could allow about 40,000 policyholders to get off the state-run insurer.

“If all goes well, they should be able to begin writing new policies as soon as next month,” Donelon said.

While the program — which is a revival of the one created in 2006 when insurers packed up and left the market in droves following hurricanes Katrina and Rita — has been described as a “band-aid solution,” Donelon said it is necessary to keep people from losing their homes.

However, he has acknowledged that there is much work to be done during Louisiana’s April legislative session to find long-term insurance solutions. In fact, the commissioner said part of the reason he will not seek reelection is to “remove politics from the vitally important upcoming” session where “many significant issues affecting our state and the future of our state’s property insurance market will be debated.”

Donelon, who is in his fourth term as commissioner, said he does not have a successor in mind. Tim Temple — a wealthy insurance executive from Baton Rouge — has launched a bid for the position. Temple, a Republican, lost to Donelon in 2019 by a margin of 6% of the vote.