The Louisiana House has approved an insurance reform measure that repeals the three-year rule. Louisiana does not allow homeowners insurance companies to drop policyholders who have been customers for at least three years. Pollock Representative Gabe Firment says his legislation will allow insurers to better manage their risk.
“Louisiana is the only place in the world that has adopted this restrictive and burdensome regulation that stifles competition and brings new investment in the Louisiana insurance market.” said Firment.
Firment says repealing the three-year rule will help attract more insurers into the state, which would result in lower premiums.
Critics says there is no guarantee this will help bring more insurers into Louisiana. Baton Rouge Representative Edmond Jordan says you’re getting rid of a great for consumer protection policy for a hope that it will result in lower premiums.
“There is no legitimate study that because of the three-year rule, our insurance rate s are higher than others,” said Jordan.
Repealing the three-year rule is part of Insurance Commissioner Tim Temple’s package of bills that he says will result will bring more insurance providers to Louisiana. Temple says more competition is the key to reversing soaring premiums.
The bill heads to the Senate for more discussion.
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