Insurance Council of Louisiana Applauds Insurance Reform Package from the Louisiana Department of Insurance; Warns Against Other Legislation Being Considered

The Insurance Council of Louisiana (ICL) commends lawmakers and Louisiana Department of Insurance (LDI) Commissioner, Tim Temple, for their collective work this Session on a legislative package aimed at providing meaningful change to the state’s insurance market. As it stands currently, the ICL believes the following bills currently moving through the Legislature have potential to significantly reduce insurance costs in Louisiana:

Legislation that has potential to reduce insurance costs in Louisiana

·      HB431 – This bill provides relative to modified comparative fault.

·      SB230 – This bill provides relative to recovery of past medical expenses.

·      HB34 – This bill provides for transparency in medical expenses.

·      HB434 – This bill creates a limitation on recovery of certain damages if a driver does not have automobile insurance. (*improvement from current law brings cap from current $15K to $100K)
HB435 – This bill provides a limitation on recovery of general damages in certain circumstances. (*modest improvement, but cap is at $5 million. The next highest cap nationwide is $1.2 million.)

·      HB450 – This bill repeals the Housely presumption.

·      HB427 – This bill establishes a reversionary trust.

·      HB519 – This bill prohibits the use of a wireless telecommunications device while operating a motor vehicle, provides for exceptions and penalties for such use, and provides for enforcement.

The ICL, a leading voice for Louisiana's insurance industry, acknowledges that these bills show a clear understanding of, and desire to address, the challenges facing policyholders and insurers alike. “As we have said previously, the ICL wants to prioritize fairness and stability within the market that also protects our policyholders,” said Rodney Braxton, Executive Director of the ICL. “Several of the bills under consideration do move us in the right direction, as they offer true safeguards that aim to curb practices driving up insurance costs for Louisiana families.”

However, the ICL also warns that several bills moving through the Legislature may do little to help Louisiana’s insurance woes—and indeed could move Louisiana in the wrong direction. These bills are listed below:

Legislation that has the potential to increase insurance costs in Louisiana

·      HB148 – This bill requires insurers to provide prior premium amounts with renewals of certain insurance policies and repeals the national standard distinction between competitive and noncompetitive markets with respect to the regulation of insurance rates.

·      HB597 – This bill enacts the so-called ‘Speedy Tort Claims Act.’

·      HB345 – This bill modifies the timeframe for insurers to send prior notice of cancellation or nonrenewal of residential property insurance policies.

·      HB356 – This bill creates the Stated Value Homeowner's Policy Act to provide homeowners an option to choose coverage based on the stated value of residential property.

·      SB68 – This bill creates the so-called ‘Homeowners' Insurance Transparency Act.’

·      SB222 – This bill requires insurers to provide a minimum 20% discount to insureds participating in the Louisiana Fortify Homes Program.

·      HB496 – This bill provides for an insured’s lapse in coverage, authorizes increases for repetitive lapses in coverage, and repeals certain related exemptions.

·      SB34 – This bill provides that alteration of a repair estimate without notification to the author of the estimate, supplement, or revision is a fraudulent insurance act.

·      HB574 – This bill prohibits the use of certain rating factors in insurance underwriting.

·      SB61 – This bill provides for the use of credit information in underwriting or rating of certain personal insurance policies.

·      HB248 – This bill provides for the commissioner of insurance’s determination of confidential, trade secret, or proprietary information relative to public inspection.

·      HB438 – This bill modifies the definition of “expenses” and prohibits use of “institutional advertising expenses” in setting insurance rates.

·      HB576 – This bill was essentially amended into HB148.

·      SB62 – This bill requires the commissioner of insurance to determine if premium rates are excessive.

·      SB136 – This bill provides for rate transparency reports.

·      SB137 – This bill requires insurers to notify the Department of Insurance upon ceasing, pausing, or resuming the writing of policies in a particular region.

While these bills may look beneficial on the surface, the ICL warns that many do not get at the real cost drivers of insurance rates, and there is a cost of compliance associated with each of these bills which will ultimately be included in rates. “We must always look at the substance of bills over appearance, and while many of these bills appear to help, they may cause unneeded government overreach and market uncertainty,” said Braxton. “We want to prioritize bills that have a positive impact on rates and reduce costs, which benefits all of Louisiana.”

The ICL remains committed to working with lawmakers to ensure that any legislative solutions introduced will effectively improve the market for both insurers and Louisiana residents.

“Our dialogue with lawmakers is ongoing, and we will continue to fight for real, effective solutions that bring stability, fairness, and competition back to Louisiana’s insurance market,” Braxton added.

The Insurance Council of Louisiana will continue to monitor the progress of the legislative session closely and remain an active participant in the discussions surrounding these critical reforms.