Louisiana Governor Signs Package of Property Insurance Reform Bills
Louisiana governor Jeff Landry signed a package of insurance reform bills Tuesday aimed at encouraging insurers to write more business in the state’s property market.
The legislation, endorsed by Louisiana Insurance Commissioner Tim Temple, will give property insurers more flexibility over policy cancellations, replace a prior approval rating method for a a file-and-use system, and establish a tighter process for insurers to initiate loss adjustments.
“Louisiana is not healthy and it’s certainly not competitive,” Temple said at a news conference. “These bills were all designed to restore confidence back in the Louisiana marketplace.”
The most controversial of the bills passed by lawmakers this session is House Bill 611, which repeals a law unique to Louisiana that prevents carriers from canceling, nonrenewing or raising deductibles on policies that have been in effect for more than three years, except under certain condition. Louisiana is the only state in the U.S. with such a law.
House Bill 611, authored by Rep. Gabe Firment, removes the three-year rule for new policies and allows insurers to nonrenew up to 5% of their three-year policies each year.
Temple has said that repealing the three-year-rule is a necessary step in attracting insurers back to the state.
“Some of these bills aren’t popular but they bring Louisiana back into the mainstream,” Temple said on Tuesday. Temple said that a greater availability of insurers will ultimately bring more affordability to Louisiana.
Senate Bill 295, authored by Sen. Heather Cloud, increases speed-to-market for insurance products and rate changes by updating the Louisiana Department of Insurance’s rate and form filing approval process from a prior approval method to a file-and-use system. Insurers will be able to immediately start selling policies as long as they meet current benchmarks.
Senate Bill 323 establishes that insurers will have 14 days to initiate loss adjustments for non-catastrophic claims and 30 days for post-catastrophe. The bill, authored by Senate Insurance Committee Chairman Kirk Talbot, creates a cure period to give parties more time to resolve disputes before turning to litigation.
Talbot said the legislation will make the claims process “very streamlined” for the consumer.
The final bill of the package, House Bill 120, authored by Rep. Matthew Willard, extends the Louisiana Fortify Homes Program, which offers grants of up to $10,000 to homeowners to retrofit their roofs to the Fortified standard set by the Insurance Institute for Business & Home Safety.
The Louisiana Fortify Homes Program was introduced in 2023 under former commissioner Jim Donelon. State lawmakers allocated $30 million of funding for the first year of the program. Legislators still need to secure funding for the next round of grants.