Citizens, Work Comp Bills OK’d in Louisiana

The Louisiana Legislature adjourned June 25, approving two bills of importance to the insurance industry late in the session, but bypassing several tort reform measures that some insurance and business trade groups had supported.

SB 130, which revises the way Louisiana Citizens Property Insurance Corp. develops rates, was approved. Insurer trade groups, including the American Insurance Association, praised the legislation, saying the new rating method will ensure the state-run company remains non-competitive with private insurers.

Under existing law, Citizens must establish its rates based on a formula that averages the top 10 most expensive rates in a parish, and then adds a 10 percent surcharge to that amount. SB 130 ensures that Citizens’ rates are based on rates charged by private insurers where there is a competitive market by requiring that the 10 percent surcharge be tacked on to the highest rates charged by those companies writing at least 2 percent of the homeowners polices in a parish.

For new companies in a parish that have not reached the 2 percent market threshold, they must have sold at least 25 homeowners policies in the previous year to be included in the Citizens rate structure. SB 130 also requires Citizens to charge its rates by postal ZIP codes, rather than by an entire parish.

Also approved was HB 333, the named-storm deductible bill, which limits consumers’ exposure to just one named-storm deductible per each hurricane season.

Late in the session, lawmakers passed SB 303, a workers’ compensation medical treatment bill. According to the AIA, SB 303 requires that medical treatments adhere to a new treatment schedule and that such treatments be in accordance with the principles of evidence-based medicine.

The legislation requires the director of the Office of Workers’ Compensation Administration to establish a medical treatment schedule, in accordance with EBM principles, which the Administration must formally adopt by Sept. 30, 2010. The director will also be responsible for appointing a medical advisory committee. In addition, the director will be given the authority to contract with a medical director in order to oversee the development and mandated bi-annual review of the treatment schedule.

HB 220, 245 and 345, a trio of bills aimed at providing guidelines and transparency in asbestos exposure related lawsuits, were passed by the House but not taken up by the Senate. The bills had been supported by insurance trade groups and other associations representing business interests, and had received high levels of support in the House, the AIA said. The trade group attributed the bills’ failure in the Senate to an “intense lobbying campaign” by the plaintiffs’ bar.