With the Louisiana legislative session set to end Thursday, a bill aimed at clarifying the obligations of parties involved in property insurance claims was sidelined this week after “detrimental” amendments were added by state senators.
House Bill 601, authored by Rep. Mike Huval (R-Breaux Bridge), passed the lower house last month on a vote of 77-20. But during debate on the measure this week in the Senate, Sen. Bret Allain (R-Franklin) added amendments to the bill that business groups and those involved in the industry criticized.
The Louisiana Association of Business and Industry (LABI) said Allain`s amendments, which were approved on a 25-13 Senate vote, made the reform provisions less clear by removing key definitions and obligations, most prominently the definition of “proof of loss.”
LABI’s general counsel, Lauren Hadden, said that prior to being amended, HB 601 represented a first step in stabilizing the state’s property insurance market.
“The amendments voted on (June 5) effectively gutted much-needed guidance clarifying each party’s obligations in the claims process, and in fact further muddled the duties and obligations imposed on each party, thereby inevitably leading to more litigation,” Hadden said in a prepared statement. “In voting for the amendment, 25 senators left businesses and policyholders constrained by an insurance market that is unaffordable and limited in availability.”
Jeff Albright, CEO of the Independent Insurance Agents & Brokers of Louisiana, also said the bill, as originally proposed, would have benefited the industry.
“The current bad-faith statute does not clearly establish what policyholders must do to force insurers to pay claims,” Albright said in an email to the Louisiana Record. “HB 601 codified current Louisiana Supreme Court jurisprudence, established clear definitions, deadlines and a proof of loss form to give policyholders a clear process to get their claims paid without having to pay an attorney to litigate.”
Allain’s decision to amend the bill led to the removal of many of the clarifications, he said.
“The only group that benefited from the amendments are the plaintiff attorneys,” Albright said.
HB 601 was returned to the legislative calendar this week, meaning it can be revived at a later date. As the end of the session looms, however, the chances of that happening become more remote.
The consumer group Real Reform Louisiana had criticized the bill prior to the Senate amendments being added.
“(The) anti-consumer, pro-insurance legislation … will make it easier for big insurance companies to hassle policyholders and indefinitely delay claims with endless requests and inspections,” a post on the group’s website states.