Louisiana insurance commissioner believes new legislation can ease crisis
Editor's note: This story has been corrected to reflect a $15 million allocation to the program.
BATON ROUGE, La. (BRPROUD) -- While a number of high-profile issues took the spotlight of the regular legislative session, Louisiana is still in an insurance crisis. Several bills looking to address the state's insurance crisis have been signed or are waiting on the governor’s desk.
Insurance Commissioner Tim Temple believes that many of the bills that passed will be major benefits for a “free market” approach to the insurance crisis.
Act 3 aims to make the claims process better for people, according to Temple. It also created a process to have the policyholder and company have a last mediation before courts get involved.
“If you do feel that you're getting to that point where you're about to litigate, it brings both parties together for one last good faith effort to try and resolve the issue,” Temple said.
Another new law, Act 9, does away with the three-year rule. Before, if someone has had three renewals with a company they could not have their policy canceled. Now a company can cancel 5% or request more of their policies, but they can’t all be focused in one area. While some policyholders bristle at the idea of doing away with those protections, Temple claims it is one of the major issues companies had when considering coming to Louisiana.
“You know, if reinsurers know that companies can't manage their book of business, it makes it more pricey to reinsure that book,” Temple said.
The legislature agreed to keep the fortified roof program running through Act 8. It helps homeowners get grants to replace their roofs with a stronger model to help bring down premiums. The legislature allocated $15 million for it this year.
“That is the fastest way that a consumer can get relief on their premiums is to put a fortified roof on,” Temple said.
There always is a risk of another big storm on the horizon, but Temple believes these new laws should help make sure more people have options for insurance.
“Whatever Mother Nature throws our way, that's what we have to deal with. But these laws and regulations are designed outside of weather-related events to make Louisiana into a more competitive place because we have the same exposure as Texas and Mississippi and Alabama and Florida,” Temple said. “So if a hurricane comes to the Gulf and impacts one of those states, they still have regulations and laws that the insurance companies have to deal with and the consumers have to work with.”
Insurance reform advocates are not so positive about the outlook of the changes in the law. Ben Riggs, the executive director of Real Reform Louisiana, released the following statement on the slate of bills.
“Louisiana families are suffering an insurance crisis driven by the increased threat of severe weather. Unfortunately, Commissioner Temple and a majority of the legislature chose to address this crisis by making it easier for big insurance companies to cancel policies and harder for storm victims to file claims in Louisiana. Most of the legislation passed during this session benefits insurers at the expense of Louisiana policyholders.”
Real Reform Louisiana Executive Director Ben Riggs