After the storms, 2006 a ‘critical’ year for Louisiana
The number of bills filed by members of the Louisiana Legislature for the regular session that began March 27 was relatively low, according to the Tatman Group’s David Tatman, a lobbyist for the Louisiana Surplus Lines Association. However, Tatman said, proportionately, the number of insurance related bills filed is up.
“Since the storms we’ve had two special sessions of the legislature and … other than levee boards, insurance was the only issue in both sessions. I think that tells you something about where the focus of the legislature is,” said Tatman, speaking at LSLA’s 2006 annual convention in Lake Charles, La., which had as its theme, “Life After the Storms.”
Describing the current regular session as “critical” for the industry, Tatman said legislators seem to be “worn out” but still focused on insurance issues that have grown out of complaints received in the aftermath of the storms.
“Ninety-five percent of the claims have been handled well,” Tatman said, but the ones that were not and the complaints arising from them are driving the legislative agenda. “We’ve seen draconian measures in first two sessions. We have been able with a lot of hard work to fight [them], but we’re going to see some of them again,” he said.
Among the major issues that are resurfacing is language regarding concurrent cause and retroactivity for insurance policies. Originally tacked on to Senate Bill 7, by Senator Julie Quinn (R-District 6), in the last special session, the language “would have been catastrophic for our industry,” Tatman said. The industry was able to get it removed in the House and SB 7 was passed with a provision that prohibits homeowners insurance companies from using the floodwater line as the basis to deny coverage for all damages occurring under that line. SB 7 also prevents insurers from using the fact that a home is removed from its foundation as the sole reason to deny coverage under a homeowners policy.
Tatman noted that a new bill, SB 510, reprises the concurrent cause, wind versus flood, issue. “The bill is well drafted,” he said, “Senator Quinn is capable, she’s a former insurance defense attorney. … The parade of people that have gone to her to see her about this bill is unending but she seems like she’s going to continue to push this legislation.”
He said insurers’ threats that they would leave the state if the concurrent cause and retroactivity language were passed in SB 7, carried some weight with House members during the special session. The industry was successful in convincing the House insurance committee that including such language in the bill was “bad public policy.” However, there are no guarantees with the current legislation, he said.
The brevity of the special session–only 12 days–worked to the insurance industry’s advantage with SB 7. “By the time it got through the Senate and then went to the House committee,” time was running out, Tatman said. “The time factor that played to our advantage in the special session will not play to our advantage now,” he added.
State seeks companies
Louisiana Insurance Commissioner Jim Donelon, told convention attendees he is working to increase the number of companies writing homeowners policies in the state, the Associated Press reported. Some 20 insurers write at least 1 percent of the homeowners market in Louisiana and Donelon wants to see more.
He said he is trying convey the message that companies can be successful in Louisiana. He is also seeking to reassure consumers that coverage is available. An extension of an emergency rule through the end of 2006 prevents insurers from dropping customers due to damage from Hurricanes Katrina and Rita.