The Louisiana Senate Committee on Insurance has widely supported a series of four bills aimed at benefiting insurance firms garnered, despite minimal opposition questioning the prioritization of insurance companies over the residents burdened with high insurance costs.
These bills, are part of Louisiana Insurance Commissioner Tim Temple’s attempt to rein in high insurance costs. Temple, with a background spanning over two decades in the insurance sector, has introduced a shift in regulatory approach from his predecessor, Jim Donelon. He advocates for a "free market" strategy, reducing regulations to attract more insurers to Louisiana, which he believes will enhance competition and subsequently lower consumer rates. This comes in the wake of a disaster-ridden year that saw five significant natural calamities.
Temple's plan notably includes several "tort reform" proposals aimed at limiting the ability of policyholders and accident victims to file lawsuits against insurance companies and reducing potential payouts from such cases.
This initiative mirrors a failed 2019 reform effort, which, contrary to the promises of Donelon and lobbyists, saw insurance rates climb instead of decline, following the implementation of legislation that stripped consumers of key litigation tools against insurers.
The legislature is now faced with the decision to either acknowledge the shortcomings of the previous reforms or to embrace them once more. To date, the willingness to reconsider these reforms has been evident.
Among the bills is Senate Bill 323 by Sen. Kirk Talbot, which proposes a drastic reduction in the penalties under the state’s “bad faith” statute, a law that came into effect post-Hurricane Katrina to ensure fair treatment of customers by insurance firms.
In support of this bill, Temple, alongside insurance company leaders, argued that the “bad faith” statute has been a significant deterrent for insurers considering entering the Louisiana market. The committee passed this bill, moving it to the Senate floor for further discussion.
Other legislation includes Senate Bill 370, which aims to relax the rules around policy renewal, potentially allowing insurers more freedom to not renew policies. Additionally, Senate Bill 250 seeks to prevent naming insurance firms in lawsuits unless they are the direct defendants, a move that could influence jury decisions by obscuring whether a defendant has insurance coverage.
Temple, when questioned, stopped short of guaranteeing a reduction in premiums due to his proposals and did not commit to repealing the measures if they fail to decrease rates. This response highlights the ongoing challenge of addressing the fallout from the 2019 tort reform, which remains unresolved and in effect.
