BATON ROUGE – Legislation intended to lower Louisiana's high auto insurance rates, increase time to file auto accident lawsuits, and address jury trial thresholds didn't make it this session because that's what Gov. John Bel Edwards wanted, a state representative said.
"It failed because the governor and the trial lawyers in the legislature wanted to kill it," state Rep. Dodie Horton (R-Haughton) told the Louisiana Record about House Bill 372, which never made it out of a senate committee despite strong passage in the House. "They insist that the bill would have not lowered insurance rates. The only way to guarantee that is to mandate it. And ultimately, perhaps that is what they wanted, a legal mechanism to forcibly mandate and control prices."
However Horton maintained the idea behind H.B. 372 isn't truly dead and similar legislation can be expected next session.
Louisiana Gov. John Bel Edwards during an event last summer
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"Without a doubt, some sort of legislation aimed at lowering auto insurance rates will be introduced," she said.
H.B. 372, the Omnibus Premium Reduction Act sponsored by state Rep. Kirk Talbot (R-River Ridge), addressed several issues that contribute to Louisiana's high auto insurance rates. The bill also would have increased the time window to file lawsuits over auto accidents from one year to two, reduced the threshold for a jury trial from $50,000 to $5,000 and removed the collateral source rule to ensure that expenses or damages paid by other sources are considered during trial.
Other provisions of H.B. 372 would have ended direct action that allows an insurance company to be the primary defendant in a lawsuit and prohibited state courts from awarding plaintiffs' medical expenses that were reduced or paid by a collateral source.
H.B. 372 enjoyed widespread support among tort reform advocates in the state, including the Pelican Institute for Public Policy, Louisiana Free Enterprise Institute and Louisiana Lawsuit Abuse Watch. H.B. 372 also had the support of business groups, including Louisiana Association of Business and Industry, which said it would "implement long-needed and obvious reform to our legal system that will hopefully lead to better auto insurance rates for Louisiana individuals, families and businesses."
It didn't happen.
H.B. 372 passed the House 69 yeas to 30 nays on April 23 and was passed over to the senate where it was assigned Judiciary A, from whence it never emerged.
It joined a number of other tort reform bills that failed this session, including Senate Bill 154, Senate Bill 148 and House Bill 51, all of which would have repealed the state's so-called "seat belt gag rule."
The failure of H.B. 372 has been especially difficult to bear, Horton said.
"I believe in free-enterprise and the principles that competition is always good for the consumer, my constituents," she said. "While this bill did not have a socialist policy of mandating private companies charge certain prices, it did create an environment for increased competition among insurance companies."
The state needs more insurance companies, Horton said.
"Fewer companies equals less competition, which equals higher prices for the consumers," she said. "It is basic supply vs demand. The demand is high, government mandated, and yet the supply is extremely limited."
The failure of H.B. 372 and other tort reforms won't make the problems that long have dogged Louisiana go away and the solutions, likewise, will remain the same, Horton said.
"As I don't have insider knowledge of the insurance business and am not a trial lawyer, I can only address the issue broadly," she said. "First, based on the norm of other states, our jury threshold is an anomaly."
The great need remains to reduce Louisiana's jury threshold reduced, which would allow insurance companies greater flexibility in determining whether a case was worth fighting, Horton said. "For those that say this will only bog down an already overly burdened court system, perhaps we need to more closely examine our judicial system. It doesn’t appear to be a problem in other states."
The state's seat-belt gag rule, in which a jury must hear arguments about whether to introduce whether an auto accident victim was wearing a seat belt, still needs to be repealed, Horton said.
"It is utterly ridiculous how something that is a legal requirement cannot be permitted as evidence in a court case," Horton said.
Reform opponents also likely will still be around next session, Horton said.
"I want to see legislation that protects our consumers and businesses from the out of control insurance premiums," she said. "In order to do that, we need competition and a way to disincentive frivolous lawsuits. We can't do that and protect our trial lawyers' business model at the same time."