The American Insurance Association (AIA) has expressed disappointment that the Louisiana Senate chose not to consider asbestos lawsuit reform legislation during the 2009 session. The insurance company trade group, however, has commended the Louisiana Legislature for passing two measures that AIA said were balanced pieces of insurance-related legislation.
Lawmakers have passed SB 130, the Louisiana Citizens Property Insurance Corporation rate bill, which revises the way the Citizens develops rates. The AIA said the rating method in the new law will ensure the state-run company remains non-competitive with private insurers.
Also approved was HB 333, the named-storm deductible bill, which will limit consumers’ exposure to just one named-storm deductible per each hurricane season.
“Louisiana continues to take prudent steps to protect policyholders while creating an atmosphere where insurers can compete for business,” stated John Marlow, assistant vice president for AIA’s Southwest Region. “While other states have taken politically motivated actions that suppress the private market and mortgage their state treasuries, Louisiana legislators and Commissioner Jim Donelon have consistently advanced a fair and balanced agenda to encourage the private market’s participation following Hurricanes Katrina and Rita.”
SB 130 establishes a new rating formula for Citizens’ residential and commercial property policyholders who are unable to secure coverage in the private market. Under existing law, Citizens must establish its rates based on a formula that averages the top 10 most expensive rates in a parish, and then adds a 10 percent surcharge to that amount.
The bill ensures that Citizens’ rates are based on rates charged by private insurers where there is a competitive market by requiring that the 10 percent surcharge be tacked on to the highest rates charged by those companies writing at least 2 percent of the homeowners polices in a parish.
For new companies in a parish that have not reached the 2 percent market threshold, they must have sold at least 25 homeowners policies in the previous year to be included in the Citizens rate structure. The bill also requires Citizens to charge their rates by postal ZIP codes, rather than by an entire parish.
Gov. Jindal is expected to sign both pieces of legislation.
The AIA said it was disappointed that HB 220, 245 and 345, a package of bills aimed at providing guidelines and transparency in asbestos exposure related lawsuits, was not taken up by the Senate. The bills received high levels of support when they were passed by the House. The Louisiana plaintiffs’ bar mounted an intense lobbying campaign against this legislation, the AIA said.
HB 220 would have required petitioners in latent exposure cases to include for each plaintiff the name of each defendant, as well as the time period and location of the exposure and the products to which the plaintiff was exposed for each defendant.
HB 245 would have required proper venue in cases of latent disease to be established only in the parish where the plaintiff alleges substantial exposure occurred.
HB 345 would have required a plaintiff in a claim for injury, death or disease to disclose at least 180 days before trial all existing or potential claims against a trust or a fund to prevent double-dipping.
In 2008, AIA joined other business groups and employers as a founding member of the Coalition for Common Sense (CCS) in Louisiana to support lawsuit abuse reform legislation to protect commercial policyholders from frivolous suits that threaten the jobs of their employees.
Source: AIA, www.aiadc.org
Topics Carriers Legislation Louisiana
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