Louisiana Insurance Commissioner Unveils Sweeping Reforms to Address Property Insurance Crisis
Louisiana's Insurance Commissioner Tim Temple has unveiled a series of measures to tackle the state's property insurance crisis, following the green light from legislators on four pivotal bills.
Temple articulated that these endeavors aim to revamp various facets of insurance oversight and safeguard consumer interests.
The initial legislation, SB 323, endeavors to define key terms such as "catastrophic loss," "immovable property," and "residential property." Additionally, it sets forth stricter timelines for insurers to kickstart loss adjustments – 14 days for non-catastrophic events and 30 days post-catastrophe, with the potential for extensions under state scrutiny.
As per an AM Best report, the bill also stipulates that payments for catastrophic losses concerning residential properties must be disbursed within 60 days, and within 90 days for immovable property, subsequent to the receipt of satisfactory proof of loss.
In another legislative shift, HB 611, Louisiana's distinctive regulation preventing insurers from declining homeowner policy renewals if policyholders are current on payments and have maintained a three-year tenure with the carrier, is being phased out.
The bill, recently endorsed by the state Senate with a 26-9 vote, allows insurers to non-renew up to 5% of policies statewide annually, with a parish-wise ceiling of 5%. It also introduces a deductible cap at 5% of a dwelling's replacement cost unless a higher amount is solicited by the insured.
Simultaneously, SB 295 revises the filing requirements for property/casualty and liability rates. Under this statute, rates and associated data submitted by carriers are deemed sanctioned if not expressly rebuffed by the commissioner within 30 days of submission.
Moreover, the bill empowers the commissioner to adjust rates deemed inadequate or prejudicially discriminatory, necessitating insurers to collect supplementary premiums or dispense refunds.
The fourth legislative intervention, HB 120, fortifies the Louisiana Fortify Homes Program, which aims to aid homeowners in fortifying their properties against severe storms, primarily by upgrading to Fortified Roof standards.
Despite the absence of a specified funding source, the Legislative Fiscal Office anticipates the program disbursing grants totaling $25 million this year to approximately 2,500 homeowners. A $5 million allotment is recommended for 2025, with future funding contingent on legislative determinations.
"These bills offer tangible, tried-and-tested solutions to the issues that have bedeviled our market," stated Temple, highlighting the hesitancy of insurers and reinsurers to engage in the state's affairs.
He further expressed confidence that the bills will cultivate a competitive and resilient insurance market in Louisiana.
