By now you’ve heard about the signing ceremony at the Louisiana Governor’s Mansion yesterday, where Gov. Jeff Landry and a host of state legislators gathered to celebrate the signing of a handful of bills which should have a positive effect on giving Louisiana ratepayers some relief where insurance costs are concerned.

Landry’s press release following the ceremony offers some details…

Today, Governor Jeff Landry held a press conference at the Governor’s Mansion where he signed the largest tort reform effort in Louisiana history into law. Watch press conference here.

“Today, we’ve taken steps to shield Louisianans from frivolous lawsuits driven by trial lawyers—using a data-driven strategy. And we made it clear to insurance companies that they must answer to their policyholders. Over the past fifty days, I am proud to say that the only side I’ve stood with is the people of Louisiana,” said Governor Jeff Landry.

The bills signed include:

HB 148: Insurance Commissioner Authority:

• Grants the Insurance Commissioner greater authority to hold down rates.
• Texas, Mississippi, South Caroline, Florida, or Alabama—to just name a few states— all grant their insurance commissioner this power.

HB 450: Housley Presumption:

• Would require someone who sued over injuries in a car accident to show that the injuries actually occurred during the accident.

HB 434: No Pay No Play:

• Would disallow a driver without car insurance from collecting an award for bodily injury medical expenses for any amount below $100,000, up from $15,000 today.

HB 436: Illegal Aliens:

• Would prohibit undocumented immigrants who are injured in car accidents from collecting general damages

HB 431:  Comparative Fault:

• Would bar drivers responsible for at least 51% of an accident from receiving a damage award to cover their injuries.
• Under current law, a driver responsible for, say, 51% of the accident can collect a payment equal to 49% of the overall damage award.

HB 549: Dash Cam Discount:

• Provides a premium discount for commercial motor vehicles with dashboard cameras and telematics systems.

Out of this group, the bills that could make a difference are the Housley presumption, the comparative fault bill and the no pay, no play bill.

Frankly, we were surprised to see those bills get out of the Senate’s Judiciary A committee, which has long been the place where tort reform goes to die. The members of that committee, which is majority Republican but still awfully trial lawyer friendly, got a larger earful from their constituents than they’ve heard in the past and that made a difference.

There’s another measure, which is a medical transparency bill authored by Sen. Mike Reese, which is still alive and could pass. It’s been watered down to the point where it’s unlikely to move the needle. Lots of people in the business will tell you that if Louisiana doesn’t do something significant on medical transparency – this is the same debate that we had in Louisiana last year over the collateral source rule, so you’ll know – that we aren’t going to get the kind of tort reform that truly lowers insurance rates. There is also a distracted driving bill that is likely to pass, and that could help incrementally.

Judiciary A has killed pretty much everything else that was on the table.

Insurance Commissioner Tim Temple was more happy than sad about yesterday’s results, though Temple is seething over HB 148…

“With the exception of HB 148, the bills signed into law today are significant steps that Louisiana has taken toward achieving meaningful legal reform. Many additional bills that need to pass are still making their way through the legislative process, so we have a long way to go over the next two weeks if we want to fully address the cost drivers behind our unaffordable auto insurance premiums this session. At the same time, passing HB 148 was a mistake that destabilizes our market and threatens to neutralize—if not outright reverse—the progress we’re making on fixing the homeowners and auto insurance crisis in Louisiana.”

That was Temple’s statement before Jud A killed all the other tort reform bills.

And Temple hates HB 148, because it’s a trick bag for him and a way that everybody else can blame him for whatever happens to insurance rates in the state.

He now has the power to cram down insurance rates by deeming them excessive. That sounds good, we guess.

Except the carriers don’t have to write insurance in Louisiana. In case you weren’t paying attention, there are a lot of them who don’t actually write policies here.

Cram down the rates on the ones who do write insurance here and you’ll find that you’re running some of them off as well.

And with less competition in the market you’re more likely to have upward pressure on rates rather than downward.

You’ll also have an access problem, because if you’re cramming down the rates, what you’ll find is insurers writing policies for current clients but not new people. You’ll also find insurers dropping people as soon as they get in a wreck, have a car stolen or even getting a ticket. And with fewer carriers operating in Louisiana and fewer new policies being written, the problem starts to become not the high insurance rates but the inability to get insurance at all.

And you’re legally required to have car insurance if you want to drive here. So this dynamic would affect virtually everybody.

The other piece to this is who’s going to come into the Louisiana market and write new car insurance policies when they know that some politician can dictate the rates to them regardless of what their own underwriting departments are telling them are appropriate rates? The point here is to have a healthy insurance market wherein carriers can make tidy profits by offering coverage at competitive rates. To get that you need far more competition in Louisiana’s market than we have, and HB 148 puts a barrier in the way of that.

That’s the destabilization of the market Temple is talking about.

But from a political gamesmanship standpoint there’s a lot of value in this if you’re Landry. Now he can blame those high rates on Temple and accuse him of not doing his job when he doesn’t cram them down. And in 2027, when the trial lawyers throw $10-15 million against Temple in an effort to get their own guy in as Insurance Commissioner, that blame game will go into overdrive.

Our position has always been that nobody knows or cares who Tim Temple is, though. If the insurance rates are too high, the folks are going to blame it on the governor no matter what.

The point here is that what we’re seeing is positive, but marginal, improvement with this raft of legislation. What Landry signed yesterday should help a little.

We aren’t jumping up and down, because this is no revolution.

But we’re pleased. Our expectation was that nothing of significance was coming. And something did.

So yes. Let’s take the win. Yesterday was a good day, all things considered.