By Catherine Hunt | LSU Manship School News Service
BATON ROUGE–The Louisiana Senate passed 29-9 another bill aimed at lowering insurance rates by limiting damage lawsuits.
The bill by House Speaker Clay Schexnayder, R-Gonzales, attempts to change Louisiana’s legal climate that Republicans and business groups say results in Louisiana drivers paying the second highest insurance rates in the country.
A similar bill by Sen. Kirk Talbot, R-River Ridge, addressed several components of Louisiana’s tort laws that Republicans say lead to high rates, but it was vetoed by Gov. John Bel Edwards.
Schexnayder’s bill mirrors Talbot’s bill in some ways but leaves out provisions that some lawmakers say are important to lower rates.
Talbot’s bill would have decreased the monetary amount an injury has to be worth to be decided by a jury rather than a judge, called jury trial threshold; prohibited plaintiffs from suing insurance companies directly, called direct action; increased the time parties have to file lawsuits to encourage settling out of court, called prescription; and prohibited using evidence of a plaintiff receiving payment from sources besides the defendant, called collateral source.
His bill also would have allowed juries and judges to hear whether someone was wearing a seatbelt at the time of an accident.
Schexnayder’s bill, however, would only lower the jury trial threshold, prohibit juries from knowing what insurance company is involved in a suit rather than preventing companies from being sued directly and allow seat belt use into evidence.
Insurance Commissioner Jim Donelon said Talbot’s changes could have resulted in premium reductions of at least 10%. However, companies could be excused from reducing rates if they can prove that doing so would lead to insolvency. Republicans assume Schexnayder’s bill would also lower rates but could not provide an estimate.
“Instead of a home run, it’s a triple,” said Sen. Barrow Peacock, R-Bossier City, when comparing the bill to Talbot’s.
Some Republican lawmakers were disappointed with Schexnayder’s bill for leaving out changes to Louisiana’s tort laws that Talbot’s bill addressed.
“This bill will not effectively address the crisis that we have with commercial auto here in the state of Louisiana,” said Sen. Heather Cloud, R-Turkey Creek, who owns a trucking company. “It is high time for everybody that has a vested interest in the crisis that we have in the state to come together, come up with the remedy and provide relief.”
Democrats say that there is no evidence that these legal changes would lead to rate reductions, and they note that the bill does not mandate a reduction. Democrats have sponsored legislation that would try to lower rates by prohibiting insurance companies from determining rates based on marital status, credit score and other demographics, but faced opposition from Republicans.
“I believe our rates haven’t come down because we’re not truly addressing the problems,” said Sen. Jay Luneau, D-Alexandria.
Senate Judiciary A Committee voted last Wednesday to pass Schexnayder’s bill and deferred a similar bill by Rep. Ray Garofalo, R-Chalmette, that is nearly identical to Talbot’s. Lawmakers said their goal was to pass one piece of legislation from the Senate to avoid having slightly different bills competing.
Committees also passed other pieces of legislation that address the same components of tort law. Identical resolutions by Rep. Alan Seabaugh, R-Shreveport, and Sen. Robert Mills, R-Minden, would repeal the current seatbelt rule, prohibit suing insurance companies directly and remove the monetary requirement needed for juries to hear a case.
Unlike bills, resolutions are veto-proof and would have to be renewed by the Legislature every year, unless a bill that does the same thing is signed into law by Edwards. The resolutions, if successful, would take effect immediately.
Schexnayder’s bill, called the Civil Justice Reform Act, now moves back to the House for a final vote. Lawmakers also could still attempt to override Edwards’ veto of Talbot’s bill before the special session ends on July 1, but they have not been able to pull together enough votes so far.