Louisiana Insurance Update: Bills We're Watching

At Kastner Insurance Group, we stay on top of the changing laws that significantly affect our industry and the residents of this state. Let's take a quick look at some of the big ones currently. 

More than a few bills would change the insurance scope for Louisiana residents, so we are watching them closely. Below is a breakdown of the bills we are currently monitoring and what they could mean for you.

Summary of Property Insurance Reforms:

Each of the below bills has made it through the legislature and is headed to the governor's desk

SB323 The "Bad Faith" Bill

The proposed law:

- provides property damage insurance claims are subject to a two year liberative prescription period and provides any penalty for breach of a duty that is based solely on failure to pay the amount of the claim due within the time required by proposed law following receipt of satisfactory proof of loss will only be awarded a penalty if the breach is found to be
arbitrary, capricious, or without cause.

- requires an insurer to transmit payment due for a catastrophic loss of a residential property within 60 days after receipt of satisfactory proof of loss and requires an insurer to transmit payment due for a catastrophic loss of an immovable property within 90 days after receipt of satisfactory proof of loss.

- retains present law and adds an exemption for the La. Insurance Guaranty Association from any liability for any special damages provided for in present and proposed law, provided an insurer owes to his insured a duty of good faith and fair dealing.

- provides an insurer in bad faith is subject to penalties 

HB 611 INSURANCE/PROPERTY: Provides relative to homeowners' insurance and termination of certain policies.

Present law:

- prohibits insurers providing property, casualty, and liability insurance from cancelling or nonrenewing a homeowner's policy or increasing a policy deductible that has been in effect and renewed for more than three years, unless certain circumstances apply.

Proposed law:

- retains present law but deletes an insurer's present law prohibition against
increasing deductibles for homeowners' policies in effect and renewed for more than three
years.

- amends present law to provide that the prohibition does not apply to modifications of policy deductibles. Further adds that modification of coverage at the time of renewal is not a cancellation or failure to renew a policy.

- provides that present and proposed law do not apply to policies issued after Aug. 1, 2024.

- prohibits an insurer from requiring a homeowners' policy deductible that exceeds 5% of a dwelling's coverage amount, unless the insured requests otherwise.

Present law

- authorizes an insurer to file with the commissioner of insurance certain rating plans with respect to changing policy deductibles for policies in effect for more than three years on or before August 1, 2024.

- requires the insurer to include in its filing the details of plans to write new business
in regions or areas where a new deductible will apply.

- requires the commissioner to base approval on the insurer's commitment to writing new business and authorizes approval of filings in the best interest of policyholders.

- further authorizes the commissioner to subsequently rescind approval of any filing if the insurer fails to write new business in accordance with the plan.

- requires any company that makes a filing in accordance with present law to reduce the rates paid by the individual homeowner by the amount determined to be actuarially justified by the commissioner.

Proposed law:

- the proposed law authorizes an insurer to file a plan with the commissioner to nonrenew up to 5% of its customers' policies per calendar year for any reason included in the plan for policies in place for at least three years prior to Aug. 1, 2024.

- requires the commissioner's approval of an insurer's request to nonrenew more than 5% of the policies in a given calendar year, and further requires the commissioner to adopt regulations in accordance with the Administrative Procedures Act setting forth requirements for the plan and request authorized in proposed law.

So what does it boil down to?

The Committee Amendments Proposed by House Committee on Insurance to the original bill:

1. Amend proposed law to authorize an insurer to file a plan with the Commissioner to nonrenew up to 5% of its customers' policies per calendar year for any reason, provided that no more than 5% of policies in any one parish are included in the plan.

2. Require Commissioner's approval of an insurer's request to nonrenew more than 5% of policies in a given calendar year.

3.  Provide that insurer's plan and request is propriertary or trade secret. 

4. Require the Commissioner to adopt regulations in accordance with the APA setting forth requirements for the plan and request authorized in proposed law.

5. Prohibits an insurer from requiring a homeowners' policy deductible that exceeds 5% of a dwelling's coverage amount, unless the insured requests otherwise.

6. Provide an effective date of Jan. 1, 2025, except fro RS 22:1265(K) of proposed law, which becomes effective upon signature of the governor or lapse of time for gubernatorial action, or upon subsequent approval of the legislature. 

The House Floor Amendments to the engrossed bill:

1. Modify language to provide that proposed law prohibits an insurer from requiring
   a homeowners' policy deductible that exceeds 5% of a dwelling's coverage amount, unless the insured requests otherwise.

2. Make technical changes.
   

HB120 Fortify Homes Program

This bill is to repeal the termination date relative to the Louisiana Fortify Homes Program Present law sunsets the LA Fortify Homes Program within the LA Department of Insurance (LDI) on 6/30/25.

Proposed law repeals the sunset provision; thereby making the LA Fortify Homes Program permanent.

Summary of Auto/Tort Reforms:

SB84 - Offer of Judgement

Present law:

- provides at any time more than 20 days before the time specified for the trial of the matter, without any admission of liability, any party may serve upon an adverse party an offer of judgment for the purpose of settling all of the claims between them. The offer of judgment shall be in writing and state that it is made pursuant to present law; specify the total amount of money of the settlement offer; and specify whether that amount is inclusive or exclusive of costs, interest, attorney fees, and any other amount which may be awarded pursuant to statute or rule. Unless accepted, an offer of judgment shall remain confidential between the offeror and offeree. If the adverse party, within ten days after service, serves written notice that the offer is accepted, either party may move for judgment on the offer. The court shall grant such judgment on the motion of either party.

- provides that if the final judgment obtained by the plaintiff-offeree is at least 25% less than the amount of the offer of judgment made by the defendant-offeror or if the final judgment obtained against the defendant-offeree is at least 25% greater than the amount of the offer of judgment made by the plaintiff-offeror, the offeree must pay the offeror's costs, exclusive of attorney fees, incurred after the offer was made, as fixed by the court.

- provides that the fact that an offer is made but not accepted does not preclude a
subsequent offer or a counter offer. When the liability of one party to another has been determined by verdict, order, or judgment, but the amount or extent of the damages remains to be determined by future proceedings, either party may make an offer of judgment, which shall have the same effect as an offer made before trial if it is served within a reasonable time not less than 30 days before the start of hearings to determine the amount or extent of damages.

Proposed law:

- retains present law

- provides that if the final judgment obtained by the plaintiff-offeree is at least 25% less
than the amount of the offer of judgment made by the defendant-offeror or if the final judgment
obtained against the defendant-offeree is at least 25% greater than the amount of the offer of
judgment made by the plaintiff-offeror, or if the final judgment is in favor of the defendant-offeror, the offeree must pay the offeror's costs, exclusive of attorney fees, incurred after the offer was made, as fixed by the court.

Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Judiciary A to the original bill

1. Changes "any plaintiff" and "any defendant" to "any party".

2. Adds that if the final judgment is in favor of the defendant, the offeree must pay the
   offeror's costs incurred after the offer was made.

3. Removes the award of attorney fees, if the final judgement is in favor of the defendant.

Senate Floor Amendments to engrossed bill

1. Makes technical changes.
2. Changes "defendant" to "defendant-offeror".
3. Clarifies that the offeree must pay the offeror's costs, exclusive of attorney fees.
   

SB130 - Jury Trial Threshold

Present law:

- provides that a trial by jury shall not be available in:

1. A suit where the amount of no individual petitioner's cause of action exceeds $10,000 exclusive of interest and costs, except as follows:

   (a) If an individual petitioner stipulates or otherwise judicially admits 60 days or more prior to trial that the amount of the individual petitioner's cause of action does not exceed $10,000 exclusive of interest and costs, a defendant shall not be entitled to a trial by jury.

   (b) If an individual petitioner stipulates or otherwise judicially admits for the first time
   less than 60 days prior to trial that the amount of the individual petitioner's cause of
   action does not exceed $10,000 exclusive of interest and costs, any other party may
   retain the right to a trial by jury if that party is entitled to a trial by jury pursuant to
   present law and has otherwise complied with the procedural requirements for
   obtaining a trial by jury.

   (c) If, as a result of a compromise or dismissal of one or more claims or parties which
   occurs less than 60 days prior to trial, an individual petitioner stipulates or otherwise
   judicially admits that the amount of the individual petitioner's cause of action does
   not exceed $10,000 exclusive of interest and costs, a defendant shall not be entitled
   to a trial by jury.

2. (a) A suit commenced in a parish or city court, wherein the individual petitioner
   stipulates or otherwise judicially admits that the amount of the individual petitioner's
   cause of action does not exceed the amount in dispute to which the jurisdiction of the
   court is limited by present law, exclusive of interest, penalties, attorney fees, and
   costs.
   (b) Present law shall not apply to delictual or quasi-delictual actions, which shall be
   governed by the present law.

3. A suit on an unconditional obligation to pay a specific sum of money, unless the defense
   thereto is forgery, fraud, error, want, or failure of consideration.

4. A summary, executory, probate, partition, mandamus, habeas corpus, quo warranto,
   injunction, concursus, workers' compensation, emancipation, tutorship, interdiction,
   curatorship, filiation, annulment of marriage, or divorce proceeding.

5. A proceeding to determine custody, visitation, alimony, or child support.

6. A proceeding to review an action by an administrative or municipal body.

7. All cases where a jury trial is specifically denied by law.

Proposed law:

-  provides that in a suit for damages arising from a delictual or quasi-delictual action where an individual petitioner stipulates or otherwise judicially admits that his cause of action exceeds $10,000 and is less than $50,000, a party may obtain a trial by jury by filing a pleading demanding a trial by jury and providing a cash deposit of $5,000 no later than 60 days after filing the request for a trial by jury.

- retains present law but removes the $10,000 limitation upon jury trials, and changes
the cash deposit from $5,000 to $4,000.

Summary of Amendments Adopted by Senate

1. Makes technical changes.

2. Includes an exception for the limitation upon jury trials if an individual petitioner
   stipulates that notwithstanding the amount of his cause of action, any other party
   entitled to a jury trial retains that right.

3. Changes the cash deposit for jury trials from $5,000 to $4,000.

Senate Floor Amendments to engrossed bill

1. Makes technical changes.

2. Removes an exception to the right to a jury trial.

3. Removes the $10,000 limitation upon jury trials.

4. Adds a January 1, 2025 effective date.

We've got you covered! 

If all this seems a little confusing, don't worry! We're following all of this very closely and will continue to keep you informed of any changes that you need to know about!

Keep an eye out for more information about these important legislative updates through our blogs and monthly blasts.

In the meantime, if you have any questions or need more information, feel free to call us anytime!

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