Louisiana: House Insurance Committee Appears Committed to Free Market, So Far

The Louisiana House Insurance Committee met April 10 and discussed two bills that are problematic for the fragile insurance market in that state. While there was some grumbling about the cost of coverage, members generally agreed that Louisiana should not follow Florida’s example for addressing coastal insurance concerns.

Current law requires that the rates for policies issued by the Louisiana Citizens Property Insurance Corporation be noncompetitive and at least 10 percent above the rates charged among the 10 insurers with the greatest total direct written premium in each parish. The 10 percent surcharge does not apply in certain parishes specifically named in statute.

HB 213 would expand the surcharge exemption to any parish located along or below the Interstate10/Interstate 12 corridor. Several members of the committee, as well as insurance industry representatives, spoke against the proposal, emphasizing the need to depopulate Citizens and encourage the private market. The bill was deferred without objection.

HB 238 was presented as an “anti-cherry-picking” bill. It would require companies writing homeowners business in Louisiana to provide coverage at specified rates in all parts of the state. Speakers and committee members again expressed the need to allow the private market to work without heavy-handed government intervention. This bill was also deferred.

Another version of “anti-cherry-picking” language, focused on policyholders who are veterans or active duty military, is included in SB 61. It would require every motor vehicle insurer authorized also to sell homeowners insurance in Louisiana to make homeowners insurance available to active duty military or armed forces veteran policyholders if the companies write auto policies for those consumers. The bill is poised for a third and final reading in the full Senate.

Direct questions to NAMIC State Affairs Manager Liz Reynolds.

Posted: Tuesday, April 15, 2008 12:00:00 AM. Modified: Tuesday, April 15, 2008 2:02:55 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.