La. Senate: Rating Commission Should Approve Rate Changes

May 3, 2006

All insurance rate hikes in Louisiana should get approval first from the state’s Insurance Rating Commission before being enacted, the Senate has decided.

Senate Bill 693, backed 21-15, would reverse a law pushed by the insurance industry and passed three years ago that allows insurance companies to raise rates by up to 10 percent a year without first getting approval by the rating commission. Financial experts in the Department of Insurance can block the rate changes if they decide they are not justified.

But Sen. Robert Adley, D-Benton, said rates should be raised only after the facts and figures used to justify those increases are aired publicly and approved by the rating commission, whose members are appointed by the governor, at a public meeting. Adley said the hurricanes have amplified the need for public hearings on insurance increases.

“We have to do whatever we can to retain costs, and I believe this is one of the ways we can contain costs at least a little bit,” said Sen. Don Cravins, D-Opelousas, an insurance salesman and supporter of Adley’s bill.

Opponents of the measure said it would dissuade insurance companies from staying in Louisiana when it already is difficult to get insurance in some areas after hurricanes Katrina and Rita.

“This is not the solution,” said Sen. Julie Quinn, R-Metairie.

The Senate rejected a proposed amendment to the bill that would have done away with the rating commission entirely. That amendment failed in an 11-23 vote.

Adley’s bill goes next to the House for debate.

The House, meanwhile, rejected a bill that would prohibit new drivers from using their cell phones while driving unless they have a handsfree device.

The restriction would fall away after the drivers have their licenses for more than a year.

But the measure by Rep. Dale Erdey, R-Livingston, got only 44 votes. It needed 53 to pass.

The bill couldn’t get the needed votes even after it was changed so that police officers couldn’t stop anyone solely for talking on the phone while driving. It could only be added to the list of violations for a driver who was stopped for something else.

Erdey said the bill (House Bill 1013) would save lives, following the lead of 11 other states that have similar laws.

“Cell phones are in fact a distraction, and distractions cause accidents. That’s just the way it is,” he said.

Opponents said the measure would be impossible to enforce and target only one distraction when there are dozens of possible distractions for drivers. Rep. Shirley Bowler, R-Harahan, said the bill only would encourage people to buy more expensive, handsfree, cell phone equipment.

The House also approved a bill that would prohibit companies from refusing credit solely because of foreclosures or missed payments caused by hurricanes Katrina and Rita. The measure (House Bill 113) goes next to the Senate for debate.

Topics Louisiana Politics

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