Louisiana Legislation Targets Homeowners, Surplus Lines

Several bills of interest to both homeowners and the insurance industry are making their way through the Louisiana legislative session, which convened April 27.

House Bill 166 was sent to the full House of Representatives after being approved by committee. It would increase an existing fee added to homeowners insurance bills, the intention of which is to raise $1.25 million to fund LSU’s Fire and Emergency Training Institute, which trains firefighters statewide but is facing big budget cuts.

The fire training institute is partly funded by a fee — or “assessment” — paid by homeowners with their insurance bills. The current assessment is one-half of 1 percent of the premium paid by homeowners.

The Associated Press reported that opponents of the bill believe the fee amounts to a tax and say Gov. Bobby Jindal is certain to veto it.

HB 166 passed through committee over the objections of committee chairman Rep. Hunter Greene, R-Baton Rouge, who repeatedly cautioned lawmakers against approving a pro-tax bill with a possible veto looming.

Surplus Lines Exempted

House Bill 333, by Rep. Kleckley, which places limitations on named-storm, hurricane, and wind and hail homeowners insurance deductibles, passed the House of Representatives and was sent to the Senate after being amended to exempt surplus lines insurers.

HB 333 as proposed “provides that any separate deductible that applies in place of any other deductible to loss or damage resulting from a named-storm or hurricane shall be applied on an annual basis to all named-storm or hurricane losses that are subject to hurricane/named storm deductibles,” according to an analysis released by the House.

The analysis explained that the Louisiana Department of Insurance believes the bill as written “could increase homeowners premiums by approximately 1.5 percent due to insurers attempting to cover risks with premium increases that are now covered by separate named storm deductibles.”

In 2007, homeowners paid approximately $1.4 billion in homeowners premiums to both standard and surplus lines property/ casualty insurers, according to insurance department figures.

Finally, Senate Bill 290 by Sen. Quinn, which exempts surplus line insurers from provisions regarding co-insurance clauses, was passed by committee and sent to the full Senate.