Louisiana: Legislature Nearing Adjournment; Bill Status

Insurers scored a victory for marketplace modernization in Louisiana last week with House passage of SB 160, which would allow for “named storm” deductibles to vary by geographic territory. The bill is now pending in conference committee.

No other state in the U.S. prohibits insurers from applying different deductibles based on actual windstorm risk. “SB 160 will provide flexibility for companies doing business in Louisiana. More choices for consumers are sure to follow,” noted Liz Reynolds, NAMIC Southeast state affairs manager. The bill limits the amount of the increase in a total deductible to not more than four percent of the value of the property being insured.

The Louisiana session is nearing adjournment, and several other bills of interest to the property/casualty insurance industry have passed or are nearly there.

In order to reinforce that Louisiana Citizens Property Insurance Corporation is clearly an insurer of last resort, SB 17 would require applicants to disclose each insurer that denied property insurance coverage to the applicant. SB 149 will prohibit including fines and penalties in rate filings, and the “Captive Insurers Law,” SB 150, provides for the formation and regulation of domestic captive insurers. SB 335 reorganizes and recodifies the Louisiana Insurance Code. All four bills were sent to the governor Thursday.

HB 302 provides that the 10 percent surcharge on rates charged by Louisiana Citizens Property Insurance Corporation shall not apply in St. Mary Parish, as is already the case in 11 other coastal parishes. The bill was signed by both the speaker of the House and the president of the Senate last week.

Louisiana’s state insurance fraud investigation unit, housed within the Department of Public Safety and Corrections, was set to terminate July 1, 2008. HB 1147 extends the termination date to July 1, 2012. The speaker of the House signed the legislation Friday.

HB 437 will provide that after an insurer has paid and satisfied an insured’s third physical damage claim, the insurer may increase the deductible to $500 without such action being deemed a cancellation of the coverage of the policy. The legislation is on the Senate calendar, subject to a call for final passage.

SB 308 is awaiting final passage by the House. The bill provides for a pre-trial hearing regarding the qualifications and admissibility of expert witness testimony and extends the deadline for filing expert witness disclosures.

In other Louisiana news last week, Insurance Commissioner James Donelon announced the successful completion of the first wave of insurance policies to be removed from the Louisiana Citizens Property Insurance Corporation. A Department of Insurance press release noted that the depopulation is the direct result of the Insure Louisiana Incentive Program, which provides matching grants to qualified insurance companies that write new property insurance policies in the state under strict requirements of the program.

Donelon was quoted in the release. It’s “good news for consumers because we need increased competition in our property insurance market. More choices lead to better prices.” He also pointed out that legislation is making its way through the process to authorize a third round of grant money. SB 44 was sent to the governor Thursday.

Additionally, the DOI release mentioned SB 240, which would increase the limits of liability of the Louisiana Insurance Guaranty Association from $150,000 to $300,000 per claim subject to the maximum limit of $600,000 rather than $300,000 per accident or occurrence. This increased security, according to DOI, is important because the companies participating in the incentive program are not household names though they have met substantial solvency requirements. SB 240 passed the House last week and was sent back to the Senate for concurrence.

Direct questions to NAMIC State Affairs Manager Liz Reynolds.

Posted: Tuesday, June 17, 2008 12:00:00 AM. Modified: Friday, June 20, 2008 4:20:28 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.