(Originally published in Citizens for a New Louisiana) — Last week in Baton Rouge, a few lawmakers reminded us who they really represent. On the campaign trail, they promise to serve. But once elected, they behave more like rulers than representatives.
Our former state treasurer, John Schroder, used to say, “There’s just something about that building. When someone gets elected and crosses the threshold, it’s as if they lose 10 IQ points.” It was a good line at the various Republican Women’s clubs where he would speak. However funny it is, some days it’s also absolutely true.
The Session’s Worst “Insurance Reform” Bill
HB576, by Democrat Robby Carter, is one of those top-down, Soviet-style price-fixing schemes like Kamala Harris proposed to “get” those profit barons at the grocery store. Instead of addressing the root causes of skyrocketing gasoline, grocery, and other costs caused by the failed policies of Joe Biden’s autopen administration, Harris ran for office on the idea of capping how much the “free market” would be allowed to charge for goods and services.
Price fixing has failed every time it’s been tried—something Americans have learned and forgotten repeatedly since our nation’s founding. It was probably Calvin Coolidge who said it best. If you aren’t familiar with our 30th President of the United States, his hands-off approach to markets generated the greatest financial boom our country has ever experienced. Regarding price controls, he asked,
Isn’t it strange that men have the notion that by passing a law, they can suspend the operations of economics?
A century later, some Louisiana lawmakers are still trying to defy economic gravity and expecting different results. There’s a reason that our insurance rates are higher than every single other state. It might have something to do with who’s flying legislators to luxury hunting lodges in private jets and who isn’t. It’s not because the same insurance companies that operate fairly in the other 49 states suddenly decided to take advantage of Louisiana.
HB576 didn’t have a chance, so freshman Rep. Brian Glorioso amended HB148 to include price controls. That amended bill couldn’t have squeaked out of the House without the unanimous Democratic Party support it received.
Insurance Commissioner Tim Temple
A few days ago, I attended the Freedom Caucus dinner. Louisiana Insurance Commissioner Tim Temple reviewed some numbers in his prepared remarks. He said that New York has approximately five times the population of Louisiana, yet it has fewer personal injury insurance claims. Not fewer per-capita, but fewer in number. Let that sink in for a moment. His findings show Louisiana has the highest per-capita injury claims of any other state, and number two isn’t even close.
The numbers are sobering and point to an abuse of the system, not the insurers. So, what would happen if someone were gifted the power to control how much insurance companies could charge for services in Louisiana? That should be a pretty easy question for anyone in business. Insurance companies would either go broke or get out, just like thousands of frustrated Louisiana residents already have.
The results of price fixing are as simple as they are predictable. If the Insurance Commissioner unilaterally lowers rates, insurance companies will be forced to leave the state. That reduces competition, which raises prices, and those higher prices would be all his fault. Alternatively, if he doesn’t unilaterally force lower rates, the high rates are also his fault. So he’s stuck in a no-win situation. That’s the trap: force lower premiums, and companies flee; refuse, and you’re blamed anyway.
Louisiana doesn’t want a scapegoat; we want reasonable insurance rates. But the people profiting most from our current system can buy more time by blaming someone else for our high rates.
Why Is Insurance So High in Louisiana?
The truth is, nobody is willing to point to one single thing as the solution. However, we all intrinsically know that something’s not right. After all, it’s not insurance companies using private jets to fly Louisiana’s elected officials to their posh, out-of-state hunting camps. The people doing that are Louisiana’s lawyers.
It’s not just the lawyers, though. Their lawsuits create some trickle-down economics that benefit billboard companies, television and radio stations, internet advertising companies, and so on. One needn’t go far to realize the magnitude of money flowing to prop up this anti-consumer insurance marketplace. You don’t have to look far to find countless ads bragging about billion-dollar “awards” for their clients.
A billion dollars. That’s not an exaggeration. Here are just a few Louisiana law firms openly bragging about how much they’ve extracted from Louisiana’s insurance market:
- Neblett, Beard & Arsenault boasts they’re responsible (all by themselves) for taking $10 billion from insurance companies.
- Laborde Earles says they’ve “recovered” over $1 billion.
- Gordon McKernan boasts $3 billion “recovered” for clients.
- Morris Bart, who claims to have the largest personal injury firm in Louisiana, says he’s “recovered” over $1 billion.
- Morgan and Morgan, with an office in New Orleans, boasts that it’s “won” $25 billion for people like you.
And that’s just the first five that popped up in an online search!
They’re Going to Make This Uncomfortable
Since he was elected insurance commissioner, Tim Temple has been begging for a special session, which has never happened. Thanks to a recent poll by Bernie Pinsonat, we may have finally arrived at a perfect-storm moment. Now is the best time to finally do something about our high insurance rates because it has everyone’s attention.
As previously mentioned, the lawyers and their downstream support are making gobs of money. This group is increasingly concerned about its gravy train, too. When posh parties didn’t work, the attack ads soon followed online, in the mail, and even through text messages. If they won’t respond to the carrot, we’ll give them the stick.
Enter a political non-profit, “Enough is Enough, Louisiana.” We know little about the organization except that well-known political operative Mary-Patricia Wray set it up in 2023. The latest annual report filed on February 10th of this year lists Lee Mallett (President, Director, and Secretary) and Todd Hollenshead (Treasurer). We’ll look more closely at this in a minute.
Shady Office Space?
The organization’s mailing address is 501 Louisiana Avenue in Baton Rouge, a building with a gated parking lot. The signs outside suggest the office contains a sea of lawyers. Considering the organization’s apparent goal is to discredit insurance companies and reform-minded lawmakers, it’s no surprise to find a glut of lawyers hanging around.
The organization’s official domicile address is 1765 O’Neal Lane, #490, also in Baton Rouge. Popping that address in your GPS will take you to GoStoreIt, a self-storage facility. Are we really expected to believe that a political operation placing statewide attack ads is being run out of a self-storage unit numbered 490?
And Then the Entire Board Disappeared
The math on one of those text messages works out to Friday, May 2nd, at around 3:00 pm. Just days before those text messages were sent out, though, Director and Treasurer Todd Hollenshead must have been aware of them. He resigned on Tuesday, April 29th. Then, on the same day of the text message, Lee Mallett and Mary-Patricia Wray were removed, and Christina Starns was added as President, Secretary, Treasurer, and Director.
Interestingly, former organization President Lee Mallett was so caught off guard by these text messages that he felt compelled to apologize to lawmakers over his association with the group. A resignation letter, also acquired by Citizens for a New Louisiana, reads, in part:
This resignation comes in direct response to the recent materials distributed by the organization targeting certain Louisiana Senators. I had no knowledge of, input in, or authorization over this activity. I was not consulted in advance and was unaware of the communication until after it was released. The use of my name and affiliation without consent has now caused significant confusion among members of the legislature and has impacted my relationships within the state.
Facebook Tells a Tale
So, if the entire board resigned, who’s responsible? Some of those resignations were likely attempts to shield participants. After all, if you look up Enough is Enough Louisiana on the Secretary of State’s website today, you’ll only see Christina Starns. Certainly, Lee Mallett appears to have known nothing about any of this. If he was trying to shield himself from public knowledge of his involvement, sending letters to every lawmaker seems like an odd way to do it.
However, the screenshots of the organization’s Facebook page strongly indicate who thinks they’re benefiting from this. The likes we were able to track down include Digger Earls, partner of the same Laborde Earles law firm that has bragged about “recovering” over $1 billion. Another was Katie Clifford, the “Business Development Director” for the Arkansas Trial Lawyers Association.
Finally, Jones & Hill, a personal injury law firm, was among the likes. They didn’t make our earlier list. However, according to their website, the firm has secured multiple verdicts or settlements exceeding $10 million and over twenty cases with outcomes surpassing $1 million.
The Facts Are Out There
This legislative regular session has become, in effect, a special session for insurance reform, if we can call it that. By my measure, it appears that some of our best lawmakers have honed in on the root cause of Louisiana’s high insurance rates, they’re finally doing something about it, and it’s making the real profit barons very nervous.
You don’t even need to take my word for it. I’ve shown you that the money flowing into this battle is one-sided. All you need to remember is who’s flying lawmakers to swanky hunting camps in their private jets. It’s not the insurance industry’s supposed “profit barons”—it’s the lawyers. Everything else is noise.
The only question now is whether enough lawmakers can withstand the pressure and stay on the side of the people. Because let’s face it, champagne, caviar, and big-dollar checks are the easier path. Let’s hope the majority remembers who they were elected to represent.