Gov. Jeff Landry last week signed into law four insurance reform bills backed by Louisiana’s insurance commissioner that the governor said will help to drive down property insurance costs for the state’s homeowners.
The reform bills include Senate Bill 323 by Sen. Kirk Talbot (R-River Ridge), a measure that aims to sideline excessive litigation, speed claims payments to property owners and provide more time to settle disputes without going to court.
““Our hope is that this package of bills will start to create more balance in the law and in the market such that we can drive the cost of property insurance down so it’s more affordable for our citizens,” Landry said in a prepared statement.
Benjamin Albright, the CEO of the Independent Insurance Agents & Brokers of Louisiana, said putting a timeline on future rate changes is difficult to do.
“Certainly, the effects are going to take some time – it won’t happen overnight,” Albright told the Louisiana Record in an email. “However, the exact timeline is complicated by a lot of factors including reinsurance renewals, loss trends and outside economic factors such as interest rates.”
But the bills are being viewed positively by insurers and will make Louisiana a less burdensome place to do business, he said.
“Increased competition is how we can ensure a stable, affordable market long-term,” Albright said.
SB 323 will reduce bad-faith penalties faced by insurance companies if they violate the law. The previous statute allowed property owners to collect twice the value of their losses through litigation. That penalty has now been cut to either 50% of damages or $5,000.
Another bill, SB 295, authored by state Sen. Heather Cloud (R-Turkey Creek) will speed up the process to bring insurance products to the market and also streamline rate changes.
HB 611, authored by state Sen. Gabe Firment (R-Pollock), eliminates what’s called the three-year rule for new policies. The new law puts Louisiana more in line with regimes in other states and allows insurers to not renew up to 5% of their policies that have been in force for at least three years, according to the state Department of Insurance.
The final bill, HB 120 by Rep. Matthew Willard (D-New Orleans), extends the Louisiana Fortify Homes Program indefinitely to encourage homeowners to strengthen their properties to withstand future storms and hurricanes. The measure provides homeowners with grants of up to $10,000 to retrofit their roofs
“Louisiana families and businesses have been suffering from skyrocketing property insurance costs since 2020,” Insurance Commissioner Tim Temple said in a prepared statement. “Change does not come overnight, but the signing of these bills is a major step toward reforming Louisiana’s insurance market.”
Other bills favored by Temple that deal specifically with legal reforms have stalled in the Senate Judiciary A Committee. Those bills include proposed limitations on the calculation of damages awards involving medical expenses and increasing public disclosures about third-party litigation funders.
Tort reform critics, such as Real Reform Louisiana, have criticized recent efforts to limit property owners’ access to the legal system, contending that such reforms will allow insurers to increase their profits and not cut costs for policyholders.