Louisiana’s House of Representatives passed House Bill 148, which would give the insurance commissioner more authority to reject rate filings considered excessive.
The bill defines “excessive” as a rate that would result in an unreasonably high profit or includes expense provisions that are too high compared to the services provided.
It also amends existing language to include excessive rates among the reasons for denial.
Governor Jeff Landry supported the proposed expansion of authority before the legislative session. He has pushed for several changes aimed at reducing automobile insurance costs.
In an April press conference, Landry criticized insurers’ profit levels and loss ratios, noting that Louisiana carriers performed better than those in Florida or Texas.
Insurance Commissioner Tim Temple opposed the bill, stating in a separate press conference that his office already holds the authority to deny rate requests and exercises that power regularly.
The insurance department did not respond to inquiries about how frequently Temple or his predecessor have denied rate filings.
The state enacted new tort reform laws in late April. These include limits on certain damages and rules about what evidence can be introduced during trials.
Separately, the state Senate is considering SB 214, which would change the commissioner’s position from an elected office to one appointed by the governor.
Under the bill, commissioners would serve six-year terms and be limited to two consecutive terms. The governor would select from a list of three nominees submitted by a nine-member committee.
This committee would include representatives from the state treasurer’s office, House and Senate insurance committees, the attorney general, the governor, and three trade associations.
Nominees must have a minimum of five years of insurance industry experience. They cannot hold another public office, nor have any direct or indirect financial interest in regulated entities.
Additionally, they must not have worked for or held equity in any insurer that was declared insolvent or barred from operating in any state.
SB 214 has been read twice and is now with the Senate and Governmental Affairs Committee. A similar idea has been promoted by Mississippi Insurance Commissioner Mike Chaney, who argued that removing elections from the process would help depoliticize the role and discourage its use as a path to higher office.
