The Louisiana legislature begins its annual session this week, and insurance coverage proposals will definitely be on the entrance lawmaking burner. The present insurance coverage commissioner made a very insightful assertion final week. “We’re at the moment within the midst of an insurance coverage disaster,” Duh, you assume? An insurance coverage disaster that has been occurring in Louisiana for over fifteen years, about so long as Rip Van Winkle was asleep, and it might appear that the Division of Insurance coverage and the legislature are simply waking as much as the actual fact.
One of many proposals is to pour extra state tax {dollars} into an incentive fund to draw extra insurance coverage firms into the state. When requested about this concept, the response for our U.S. Senator John Kennedy was: “We tried that one. It blew up in our face.” The Senator is true. In a particular session just a few months in the past, the legislature handed 42 million {dollars} over to the insurance coverage division. Few firms utilized for the funds, and the bulk that did took the tax {dollars} then went stomach up. Now the division is asking for an extra $20 million for extra incentives. So anticipate extra bankruptcies.
Here’s a partial listing of proposed new legal guidelines. (Discover that I didn’t say proposed new payments. A invoice is one thing I get within the mail for a purchase order of service. Why do these insurance coverage officers and legislators converse in gibberish?)
Underneath one other proposal, Insurance coverage firms may demand that policyholders must go get a notarized sworn assertion earlier than they might even file a declare. So a household is devastated by a hurricane with no native companies accessible and looking for cowl over their heads. Earlier than they’ll even get even fundamental assist from their insurance coverage firm, they must journey to who is aware of the place to discover a notary and likewise discover an legal professional or another person to organize a sworn proof of loss kind, then hope the put up workplace has not been shut down, ship the shape to the insurance coverage firm, and wait and wait to listen to again. What a horrible piece of laws, that’s proposed to let the corporate delay any cost.
Then there’s one other effort to shore up this state-run Residents Property Insurance coverage Firm. You’ll do not forget that Senator John Kennedy has stated the Residents was the worst, mismanaged firm within the state again when he was state treasurer. The insurance coverage division needs to ban any policyholder from receiving bad-faith fines when Residents continues its behavior of ignoring policyholders and failing to pay claims well timed. Sen. Kennedy was proper. Residents has been a catastrophe from the get-go and ought to be abolished. It ought to inform us one thing that no different state has a state-run firm like Residents.
Policyholders have to maintain the guard up when informed by legislators that these proposed adjustments are going to maintain insurance coverage charges from going up. Keep in mind it was two years in the past when the legislature authorized so referred to as tort reform that the insurance coverage commissioner promised would cut back auto insurance coverage charges by 25%. So what occurred? Have you ever checked your coverage currently? Moderately than charges happening, huge price will increase proceed to happen. Legislators have been offered a invoice of products they usually purchased proper into it. Now coverage holders are paying the value. A Massive worth.
There are just a few different proposals being provided by the insurance coverage commissioner and legislators however most of them are little greater than placing a finger in a collapsing dyke. So are there any important adjustments that could possibly be make outdoors of praying for no hurricanes? Sure, and I’ve listed quite a lot of concepts in previous columns. However the single most import idea is to have the Governor take part with different Gulf Coast state governors to kind a joint insurance coverage pool. Louisiana has enormous climate publicity however is simply too small to go it alone.
None of that is authentic or rocket science. It’s a matter of emphasis. And the Governor clearly has to develop into concerned. In all however twelve states, the Insurance coverage Commissioner is appointed. So congress will look to Governors to aggressively pursue these essential ideas. There are methods to resolve this main insurance coverage disaster. However it can take extra focus and far stronger management.
Peace and Justice
Jim Brown