Louisiana insurance regulator says new powers threaten market stability

Louisiana's top insurance regulator said a new law that gives him and his successors sweeping powers over rate requests could destabilize the state's market.

In a letter summarizing recent legislative actions, Insurance Commissioner Tim Temple said the adoption of HB 148, which was signed into law by Governor Jeff Landry as Act. No. 11 on May 28, includes "unilateral authority" for him to reject insurers' rate requests.

The new law also allows the state's commissioner to force insurers to provide refunds if he determines insurers' premiums "charged years or decades ago" were "excessive." The insurance commission could even have the right to publish proprietary or confidential information for "purely political, personal and other subjective reasons," Temple said.

Temple lauded reforms aimed to strengthen the state's insurance market, but said the new law "destabilizes our market" and could "neutralize" or "outright reverse" recent progress.

"Instead of helping address our insurance crisis, this new law makes Louisiana's insurance industry more heavily regulated than California's," Temple said. "We compete against other states for insurance company capacity and absolutely must maintain our unbiased, predictable regulatory environment that fosters competition, protects consumers and ensures the financial stability of insurers."

Among the reforms Gov. Landry signed into law is one that expands the cancellation and nonrenewal notice period to 60 days for most personal and commercial property and casualty insurance lines, and requires insurers to provide reasons for the nonrenewal.

Other reforms include preventing uninsured drivers from collecting awards for bodily injury medical expenses for any amount below $100,000; barring drivers responsible for at least 51% of an accident from receiving damage awards to cover their injuries; and the establishment of an individual state income tax exemption for grants received from the Louisiana Fortify Homes Program.