Governor John Bel Edwards introduced his 2022 legislative agenda April 14 in his e-newsletter. Among the bills are several dealing with the business of insurance, several of which are in response to the industry’s handling of claims emanating from the hurricanes of 2020 and 2021.
The bills in the governor’s package include but are not limited to:
Policy and claims materials
House Bill 316 by Rep. Matthew Willard, D-New Orleans, would require insurance companies, at specified times after property damage due to a gubernatorially declared disaster, to proactively provide policyholders with policy and claims materials to which they are already entitled. The bill is pending in the House Committee on Insurance.
Consent for deductible
House Bill 317 by Willard and Senate Bill 150 by Sen. Jay Luneau, D-Alexandria, would require policyholders to provide affirmative consent agreeing to their named storm deductible before the deductible can take effect as part of their policy. The bills would require the commissioner to prescribe a separate form regarding named storm, hurricane and wind and hail deductibles. House Bill 317 is pending in the House Committee on Insurance and SB 150 is pending in the Senate Committee on Insurance.
Insurance adjusters database
House Bill 682 by Rep. Chad Brown, D-Plaquemine, would create a database of registered insurance adjusters that is easily accessible and digestible to policyholders. The bill was reported favorably with amendments on April 13 on a vote of 11-0 by the House Committee on Insurance and is pending action on the House Floor.
Named storm fraud prevention
House Bill 692 by Rep. Ed Larvadain III, D-Alexandria, would create the Louisiana Named Storm Insurance Fraud Prevention Authority modeled after the Louisiana Automobile Theft and Insurance Fraud Prevention Authority. The authority would focus on enforcing fraud laws against bad actors after named storms. The bill was reported favorably March 23 on a 7-5 vote by the House Committee on Insurance and was recommitted to the House Committee on Appropriations where it is pending.
Mortgage lenders handling checks
House Bill 805 by Rep. Kyle M. Green Jr., D-Marrero, would create reasonable rules for mortgage companies when handling insurance checks. Specifically, the bill would require a mortgage lender to have a clear plan outlining the process for disbursement of funds received from an insurer as a result of a major claim on property, would provide a point of contact for insurance claims and establish a process through which a mortgagee can appeal a decision that is preventing or delaying the mortgagee from making repairs to the property in a timely manner. The bill is pending in the House Commerce Committee.
Bad faith penalties
House Bill 976 by Larvadain would combine the two bad faith penalties that are currently in law and increase the minimum bad faith penalty to 100 percent of the amount in dispute between the insurance company and the policyholder. The bill also would add higher penalties of 150 percent and 200 percent if the bad behavior leads the claim to drag out for more than six months or one year, respectively. The bill is pending in the House Committee on Insurance.
Auto insurance anti-discrimination
House Bill 351 by Rep. Edmond Jordan, D-Baton Rouge, would prohibit the use of certain rating factors in automobile insurance rate making. The bill would prohibit risk classification based on a person’s credit information, education level, employment, trade, business, occupation or profession. The bill would also prohibit any risk classification based on race, color, creed or national origin. The bill is pending in the House Committee on Insurance.
Post disaster tenant protections
House Bill 160 by Rep. Mandie Landry, D-New Orleans, would strengthen tenant protections after a federally declared disaster. The bill would ensure that tenant absence from a property cannot be used as evidence of abandonment for 30 days after a federal disaster declaration. The bill also would propose a penalty for landlords who wrongfully evict and would allow tenants to bring an action to stop a wrongful eviction during that 30-day period without having to pay court security bonds. The bill was reported favorably with amendments on March 29 by the House Committee on Civil Law and Procedure on a vote of 13-0-1. The bill passed the House Floor on April 6 on a vote of 101-0, and is pending in the Senate Judiciary A Committee.