Louisiana auto insurance reform bill rejected | Insurance business America
The proposed law aims to exclude medical payments under a policy
Engine & Fleet
By Kenneth Araullo
Louisiana Gov. Jeff Landry announced he would veto an insurance reform bill that sought to overhaul the state’s collateral source doctrine.
This principle of tort law ensures that policyholders are compensated for damages by the liable party, regardless of any third-party payments, such as an insurance settlement.
According to a report by AM Best, current Louisiana law allows a plaintiff to recover 40% of the difference between the amount billed and the amount actually paid to a medical provider.
The proposed law aimed to lower this threshold to 30% and exclude all medical payments under car insurance. The bill passed the state House of Representatives by a vote of 88-10 and the state Senate by a vote of 25-14.
During a press conference on June 18, Landry addressed critics’ widespread misunderstanding of the state’s collateral source laws.
“What’s absolutely entertaining is that when I read the articles, listen to the radio, and share texts from my dear friends, none of these critics or any of my friends who text me can explain to you or me what the doctrine of collateral sources is.” said Landry.
“In fact, those watching are probably scratching their heads, but they’ve heard that if we get rid of it it will be the panacea for our high insurance premiums.”
Following Landry’s veto announcement, Louisiana Insurance Commissioner Timothy J. Temple called for a special session of the Legislature to address the state’s rising automobile insurance costs.
“Louisiana residents have suffered from ridiculously expensive car insurance premiums for far too long. We all have friends in states like Texas and Mississippi who save money while paying twice as much to insure our family vehicles. Louisiana businesses, particularly those near our borders, are locating in other states to escape our extreme tariffs,” Temple said.
Despite Landry’s veto of this particular insurance reform bill, the governor has signed several other insurance-related bills into law. This includes changes to non-renewal rules, establishing timelines for processing claims, and updating rate and form approvals.
Clyde Bohne, chairman of the Louisiana Board of Professional Insurance Agents and director of the Preferred Insurance Agency of Louisiana, expressed optimism for the future.
“While we are disappointed with the veto of HB 423, we are optimistic that the insurance legislation passed this legislative session will create new opportunities for new insurers to enter the Louisiana insurance market,” Bohne said.
“Our commissioner, Department of Insurance staff, our legislators and our governor have ushered in the beginning of an insurance ‘renaissance’ in Louisiana. The availability of insurance will equate to the affordability of insurance for Louisianans.”
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2024-06-21 14:52:08
www.insurancebusinessmag.com
