NAII Urges Rate, Tort Reform in La.

The National Association of Independent Insurers (NAII) warned that without rate modernization and tort reform, the Louisiana insurance market could be in serious trouble—market shrinkage, higher prices, and federal intervention could result. In a letter to Louisiana Governor M.J. Foster Jr., NAII counsel Gregory LaCost urged the governor to consider a regulatory reform package for the state, warning “a failure to act may have dire consequences.” Louisiana has the highest homeowner loss cost in the country, and the third-largest auto loss costs, which LaCost attributed to the state’s insurance and tort environment. LaCost commended the efforts of insurance commissioner Robert Wooley, but wrote that action on the part of the governor and the state legislature was necessary to improve the situation. LaCost pointed out that states such as South Carolina that have modernized their regulatory systems have seen dramatic improvements in their insurance markets, primarily lower annual changes in the average premium for consumers. Since adopting auto reform, South Carolina has doubled the number of insurers doing business in the state, and the average premium cost continues to decline. Effective tort reform packages, from NAII’s point of view, could include issues such as the lowering of the jury threshold limit, mandatory arbitration, spousal immunity, elimination of direct action statute, modification of the comparative negligence statute, a viable fraud statute, allowance of appointed judges, and primacy of rental insurance policy over other coverage.

Topics Louisiana