The Senate Insurance Committee advanced legislation that repeals the state’s three-year rule. The rule prevents insurance companies from dropping homeowners who have been with the same company for more than three years. Insurance Commissioner Tim Temple says this bill is part of his plan to bring more insurers into Louisiana which would stabilize rates.
“We want companies coming in here. You want companies coming here. You want availability. You want affordability. This helps gets us to that.”
Former Insurance Commissioner Jim Donelon considered the three-year rule one of the best consumer protection in Louisiana.
Temple’s plan sparked debate with New Orleans Senator Royce Duplessis who believes the state’s location, infrastructure, and hurricanes are more of a barrier to insurers than the rule. Duplesis challenged Temple on whether removing the rule for insurers will reduce premiums for consumers.
“My concern and my question is – we get rid of the three year rule, rates don’t go down then what? Blame me. That’s the seat I’m in.”
Temple wants to drive down risk for insurers and analyze the re-insurance agreements held by the companies to make sure they have enough protection in case a storm hits. He says the state’s laws and regulations are the main problems when it comes to attracting insurers.
“If they have to stay on a risk that they may not want to then that ties up policy holders . It ties up reinsurance capacity. It makes it more expensive for them and inhibits them to maybe go write another insurance policy in a different area that they may want to write.”
The bill heads to the Senate floor for more discussion.
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