Committee rejects tort bill

Published: June 11, 2020


BATON ROUGE–A House committee voted 8-4 Wednesday to reject a bill that would require the Legislature to decide whether an insurance company could avoid lowering auto insurance rates if it claimed it might face insolvency.

The bill, by Rep. Ted James, D-Baton Rouge, aimed to fix problems that Democrats have with a bill by Sen. Kirk Talbot, R-River Ridge, that would attempt to lower insurance premiums by targeting Louisiana’s civil justice system.

Republicans also have problems with Talbot’s bill. After negotiating with Gov. John Bel Edwards just before the Legislature approved the bill, Talbot added wording that would require judges to award damages to injured plaintiffs at 1 ½ times the total premiums they had paid, resulting in tens of thousands of dollars more than the bill’s supporters had intended for many plaintiffs.

Legislative committees passed several bills Tuesday that would fix the wording as lawmakers wait to see if Edwards, who opposed the bill, will sign or veto it.

Republicans say that Talbot’s bill would likely lower auto insurance rates by at least 10% and up to 25% in some cases. However, if an insurance company could prove that a 10% reduction would lead to insolvency, it could be exempt from lowering its rates.

Democrats point out that Talbot’s bill does not mandate any rate reductions. They also contend that would make it harder for many injured plaintiffs to receive fair compensation.

Insurance Commissioner Jim Donelon, a Republican, has said that while Talbot’s bill doesn’t require rate cuts, he would expect most companies to cut their rates, with the only exception being firms that couldn’t do it without being forced into insolvency.

James’ bill would have required legislative approval before a company potentially facing insolvency was granted total or partial relief from rate reductions.

James said he was trying to hold lawmakers promising lower rates accountable by requiring them to decide if an insurance company could avoid rate reductions.

Read more at The Franklin Sun



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