Louisiana Insurance Commissioner Offers Bills to Protect Consumers and Improve Choices

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Louisiana Insurance Commissioner Offers Bills to Protect Consumers and Improve Choices

Published April 20, 2021

The Louisiana Department of Insurance has proposed a slate of bills for the 2021 legislative session that would protect people who want to get genetic testing, expand options for flood insurance and strengthen the insurance commissioner’s ability to protect policyholders during a governor’s emergency declaration.

“We are very excited about our package of consumer-focused bills this season. From health to property to flood, these pieces of legislation touch the lives of every consumer and will make a big difference in the day-to-day insurance options of the people of Louisiana,” Insurance Commissioner Jim Donelon said.

Some of the most important legislation requested by the LDI this year includes the following:

Health Insurance

House Bill 463, authored by Rep. John R. Illg Jr., would create a state-based exchange for individual health insurance. Louisiana is currently using the federal exchange for the sale of individual health insurance policies, but state-administered exchanges can often operate more efficiently, reducing the fees passed onto policyholders. There are now 18 states operating their own exchange, up from only six when the Affordable Care Act was passed 11 years ago.

Life Insurance

House Bill 455, authored by Rep. Mary DuBuisson, seeks to prohibit the use of genetic testing in underwriting for life, disability and long-term care insurance in Louisiana. Genetic testing for diseases such as cancer are becoming more popular tools in healthcare, but there are concerns that such information could be misused once collected. This bill would prevent a life insurance company from denying coverage, canceling or refusing to renew coverage, imposing a higher premium, or otherwise discriminating against an individual or family member due to any information revealed by genetic testing. This bill was suggested to us by cancer researchers who were having difficulty recruiting research volunteers due to life insurance concerns and is patterned after a similar bill that recently passed in Florida.

Property and Casualty Insurance

Authored by Rep. Scott McKnight, House Bill 577 would give consumers choices beyond the National Flood Insurance Program by making it easier for private carriers to write flood insurance. The bill would permit insurers to file flood rates and immediately begin using them. Insurers could subsequently adopt new rates provided they file change paperwork with the LDI within 30 days of use. This hybrid “file and use” and “use and file” system for private flood insurance would last until Jan. 1, 2027, at which point it would revert to a traditional “prior approval” system unless otherwise extended. All rates would be subject to regulation by the LDI with the same rigor as with its “prior approval” analysis of other property and casualty rates. The bill is modeled on a similar Florida law that has increased the market share of private flood insurance in that state.

The Department, through HB 15, authored by Rep. Sherman Q. Mack, will be tackling the phenomenon of staged accidents in our state by asking for an increase of penalties and adding this activity to our state’s anti-racketeering statute for direct involvement in intentionally causing or fabricating an accident. Parties such as planted witnesses, attorneys and doctors intentionally participating in such schemes would also be penalized. The bill would also impose a mandatory minimum sentence of at least five years for the aggravated staging of a motor vehicle collision where another person was seriously injured.

Emergency Powers of the Commissioner

Finally, Senate Bill 29, sponsored by Sen. Mark Abraham, seeks to streamline the existing authority of the Insurance Commissioner when the Governor declares an emergency. The change would enable the Commissioner of Insurance to react more quickly to emergency situations and safeguard the rights of policyholders during emergencies, such as when two hurricanes hit the Lake Charles area during the 2020 storm season. Currently, the Commissioner’s emergency power authority exists only when the Governor explicitly grants it so that this bill would allow the Insurance Commissioner to issue emergency rules independently, limited to the duration and geographic area of the Governor’s declaration and would expire when the Governor’s emergency declaration expires. All such emergency rules would still be subjected to oversight by the Legislature as defined in the Administrative Procedure Act.

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