A rift between Gov. Jeff Landry and Insurance Commissioner Tim Temple over policies to lower insurance rates in Louisiana widened Wednesday as the two elected leaders gave dueling testimony about an insurance bill before lawmakers.
Both Landry and Temple testified before the state House of Representatives’ Insurance Committee about House Bill 576, authored by Rep. Robby Carter (D-Amite), which the governor favors and the insurance commissioner opposes. The measure would give the commissioner greater authority to classify insurance rates as “excessive,” even when the existing market is deemed “competitive.”
In their testimony, Landry and Temple offered differing philosophies on insurance reforms despite both wanting to see Louisiana property and auto insurance rates reduced. The governor stressed a “balanced approach” of some additional legal reforms plus greater insurance commissioner authority to drive down rates, while Temple said reforms passed last year were working to reduce insurer costs and leading to some rate reductions.
HB 576 would essentially bring about a return to failed policies of the past when regulators could artificially depress insurance rates and, in turn, drive insurers out of the state, Temple said. The measure would give the commissioner the authority to lower rates based on personal or political considerations rather than on a sound actuarial basis, he said.
“House Bill 576 by Robby Carter will effectively empower the commissioner to adopt the old practices of the (Louisiana Insurance) Rating Commission,” Temple said in his testimony on Wednesday. “... Our current model is based on the NAIC (National Association of Insurance Commissioners) language that is nearly identical to 29 other states.”
The measure would allow the insurance commissioner to manipulate market forces rather than address the core problem, which Temple said was high insurance claims costs in Louisiana. The result would be chaos and have the effect of discouraging insurers from doing business in the state, he said.
Under his current authority, the commissioner said he has disputed insurer rate proposals more than 40 times since he took office at the start of last year, based strictly on mathematics. Temple added that eight insurers this year have filed for rate decreases.
“The reforms you passed (last year) are working,” he told lawmakers. “Don’t upset the progress we’ve made by signaling to the market that we are going to try something vastly different.”
In the current legislative session, Temple is supporting multiple bills, including a limit on attorney contingency fees, excluding insurer advertising costs when setting insurance rates and increased transparency in medical damages awards.
“In Louisiana, it is evident we have a problem with bodily injury claims, and we have a problem with litigation,” he said.
Ben Albright, CEO of Independent Insurance Agents & Brokers of Louisiana (IIABL), said he supports Temple's package of bills as a means to reduce legal abuse in the state, particularly measures to bar plaintiffs from recovering damages when they are 51% or more at fault for the injury and bills to reduce inflated medical costs in litigation.
"It's safe to say that IIABL and other proponents of legal system abuse reforms are disappointed that Gov. Landry has chosen to adopt the false narratives, manufactured by the trial bar, regarding auto insurance profitability rather than take bold, transformative steps," Albright told the Louisiana Record. "We've seen in other states, when the governor and the insurance commissioner can align to take a leadership role in addressing legal system abuse, they can bring about transformative change and reduce costs for consumers and businesses."
Landry said the insurance changes pursued by lawmakers in past years were simply not translating into lower rates for auto insurance consumers, given that Louisiana has consistently had some of the highest auto insurance premiums in the nation. He expressed support for HB 576 and giving the insurance commissioner expanded oversight powers to reject excessive rates, mirroring regulations now in effect in Mississippi.
Landry also favors providing a 5% premium discount for large trucks using dashboard cameras, since insurance data indicates that such dashcams reduce litigation.
Insurers operating in Louisiana have taken in $1.4 billion more than they have paid in claims, according to the governor. Such profits justify giving the insurance commissioner additional regulatory powers to reduce rates, he said.
Landry also said proposals that restrict citizens’ access to civil courts should come with guarantees for lower insurance rates and that it’s no longer acceptable for Louisianans to have exorbitant auto insurance rates.
The Insurance Committee voted in support of HB 576 Wednesday by a vote of 13-4.