Saturday, May 25, 2024

Insurance crisis: Industry-backed bills to end 3-year rule near final approval

by BIZ Magazine

BY: WESLEY MULLER –Louisiana Illuminator

Incoming Louisiana Insurance Commissioner Tim Temple speaks at the Public Affairs Research Council of Louisiana candidate’s forum April 27, 2023, at the Crowne Plaza Hotel in Baton Rouge.
Louisiana Insurance Commissioner Tim Temple. (Photo credit: Greg LaRose/Louisiana Illuminator)

Two bills to repeal a consumer protection law in Louisiana that stops insurance companies from canceling homeowner policies without good reason are nearing final approval in the Legislature.

Senate Bill 370, sponsored by Sen. Adam Bass, R-Bossier City, cleared the House Insurance Committee on Wednesday, while its lower chamber counterpart, House Bill 611, sponsored by Rep. Gabe Firment, R-Pollock, cleared the Senate Insurance Committee.

Each bill will need to pass another floor vote and will then return to their respective chambers for concurrence on any amendments before heading to Gov. Jeff Landry’s office, where he is expected to sign them into law.

The bills are very similar. Both would repeal Louisiana’s unique three-year rule, which is a current law that prohibits insurance companies from raising deductibles, canceling or not renewing homeowner policies that have been in effect for more than three years.

If either measure is approved, insurers would be allowed to cancel up to 5% of their policies each year as long as the policies aren’t all in one parish, though the 5% mark is not a hard cap. The companies can cancel as many policies as they want with approval from the state insurance commissioner.

The proposals are part of Insurance Commissioner Tim Temple’s industry-friendly agenda to create a “free market” for insurance companies in the state. Before winning election last year, Temple, a Republican, spent more than two decades in the insurance sector, owning and managing the kinds of companies he now regulates.

Either bill could be scheduled for final consideration as early as next week.

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