Louisiana Governor Jeff Landry has recently signed into law a series of measures aimed at overhauling the state’s insurance regulations, following the advocacy of Insurance Commissioner Tim Temple. Temple contends that these changes will foster a more industry-friendly environment, leading to decreased premium rates for Louisiana residents.
On Tuesday, Governor Landry approved four bills designed to grant more latitude to insurance companies, allowing them to raise rates on customers, terminate policies, and reduce legal penalties for non-payment of claims. These legislative actions reflect Temple’s vision of cultivating what he terms a “free market” for insurers within the state. Temple, a Republican, draws from over twenty years of experience in the insurance sector, having previously owned and managed the very companies he now oversees.
The shift in regulatory approach under Temple’s leadership diverges from the strategies of his predecessor, Jim Donelon. Temple advocates for decreased regulation to attract more homeowner insurance companies to Louisiana, arguing that increased competition will ultimately drive down rates and resolve the coverage crisis triggered by a series of major natural disasters between 2020 and 2021.
Critics, including advocacy group Housing Louisiana, have raised concerns about Temple’s strategy, characterizing it as an effort to favor insurance companies at the expense of Louisiana residents grappling with insurance hardships. Housing Louisiana asserts that the legislative package will boost insurance company profits by enabling them to drop longstanding policyholders, increase rates unchecked, and curtail legal recourse for policyholders.
One key component of the legislative package is Senate Bill 323, a “tort reform” measure sponsored by Sen. Kirk Talbot, which amends the state’s “bad faith” law. This change reduces penalties for insurance companies found to have acted in bad faith after a catastrophe, a provision previously enacted following Hurricane Katrina.
Additionally, House Bill 611, sponsored by Rep. Gabe Firment, repeals Louisiana’s unique three-year rule, allowing insurers to cancel or modify homeowner policies beyond the previous limitations. Proponents argue that this change is necessary to attract more insurance companies to Louisiana.
Despite the legislative push, Louisiana continues to face some of the nation’s highest property insurance premiums, exacerbated by the increasing frequency and intensity of hurricanes. Republicans advocate that relaxing regulations like the three-year rule will enable insurers to manage risk more effectively, while Democrats argue against attributing the crisis solely to regulation and litigation issues.
While some measures like Senate Bill 295, allowing insurance companies to adjust rates without state approval, favor industry interests, others like House Bill 120, extending the state’s fortified roof grant program, aim to benefit consumers directly.
The debate surrounding these legislative changes underscores a broader tension between fostering a competitive insurance market and ensuring affordable and fair coverage for Louisiana residents. As these policies take effect, stakeholders will closely monitor their impact on insurance rates and consumer protection across the state.
