There’s no doubt that auto insurance will be a dominant theme during this year’s legislative session in Louisiana. So far most of the buzz has been aimed at tort reform as a method of bringing down the cost of auto insurance premiums in the state, which are some of the highest in the nation.
But Democratic Gov. John Bel Edwards is backing bills aimed at prohibiting discrimination insurance rate setting. According to the governor’s office, Edwards is backing several pieces of legislation filed by Democratic Sen. Jay Lenau of Alexandria that address discriminatory rate setting. They are: SB 13, SB 14, SB 15 and SB 16.
In a media release the bills were summarized as:
- SB 13 prohibits insurance rate determinations based on risks classified by the gender of an insured over the age of twenty-five.
- SB 14 prohibits insurance rate determinations based on risks classified by credit score/rating.
- SB 15 prohibits insurance rate determinations based on risks classified due to the fact that the insured is a widow or widower.
- SB 16 prohibits insurance rate determinations based on risk classifications due to the fact that the insured is deployed in the military in excess of six months.
In his remarks to the Legislature at the opening of the session on March 9, Edwards acknowledged that the cost of auto insurance is too high in Louisiana.
He told lawmakers Luneau’s bills that he supporting “will actually help to lower auto insurance rates for people in Louisiana and prohibit certain arbitrary penalties.”
Edwards listed factors that auto insurers are able to employ to legally set rates: gender; credit score; loss of spouse; and military deployment.
“I think we can all agree that our auto insurance rates should be based on our driving records. Not on if you’re female, or poor, or widowed, or putting your life on the line for our country. These bills would prohibit penalties based on those factors,” Edwards said.
He added that banning discrimination in insurance rate setting “is the common sense thing to do, but more importantly, it’s the right thing to do.”
The governor’s approach is supported by an organization called Real Reform Louisiana, which the Associated Press reports is allied with Edwards. The organization has called for the Louisiana Department of Insurance to “release details of how it calculates rates,” the AP reported.
Insurance Commissioner Jim Donelon, a Republican, is strongly in favor of tort reform with regard to the auto insurance dilemma. In an interview with Insurance Journal in September 2019, Donelon said the main factor driving the high cost of auto insurance in Louisiana “is our highest in the nation claims-to-litigation ratio. We have a tort system that’s broken, that needs to be fixed.”
He added that tort reform is needed so that more companies can come to Louisiana and “do business in our state under a new set of rules that is not so onerous for auto insurers in our judicial environment.”
Related:
- Louisiana Republicans, Business Aligned on Auto Insurance, Tort Reform
- Auto Insurance Reform, Minimum Wage Hike on Louisiana Governor’s Legislative Agenda
- Louisiana Commissioner Candidate, Temple: State Is in Insurance ‘Crisis’
- Louisiana Commissioner Donelon: Tort Reform Needed to Fix Auto Insurance Crisis
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