Louisiana recently concluded its 2023 legislative session. As expected, the last session was very busy, especially in the area of property insurance legislation. Faced with a shrinking and increasingly expensive insurance market and the recent reforms in Florida, Louisiana was confronted with numerous bills that sought to address the perceived problems in its insurance market.
The Fortify Homes program received a lot of attention during this legislative session. The big property insurance bills according to the Louisiana House Legislative Services Report:
HB 294 and HB 309 Requires insurance companies to provide discounts to individuals who build or renovate their homes or businesses using certain reinforced home or commercial standards.
SB 113 and HB 309 Remove a limitation limiting rebates for fortified construction to single-family homes, thereby expanding availability of the rebate to all insurable residential and commercial properties
HB 110 Requires an insurer to offer a recommendation to upgrade a non-reinforced roof to meet reinforced standards when the roof is already damaged and undergoing replacement.
At a news conference after the legislative session, Commissioner Jim Donelon and Rep. Mike Huval that the most important long-term solution to the property insurance market is to strengthen Louisiana’s building codes and provide incentives, including a $10,000 grant for property owners to build and update their property to Fortify Homes standards.
According to proponents of the bills, these initiatives will help protect properties from severe storms. Fortify Homes has been a legislative project for years, but this year the Legislature allocated budget funds for grants, similar to what Alabama has done with its Fortify Homes program. Commissioner Donelon expressed his hope that Louisiana achieves similar success. All of Fortify Home’s bills passed unanimously or near-unanimously.
HB 183 Prohibits contracts between an insurance consumer and a third party that would transfer benefits for a property insurance loss to a third party as payment for services.
HB 183 is a prohibition on assignment of benefits that was enacted in response to legislation in other states as well as the ongoing controversy involving McClenney Moseley and their improper use of assignment of benefit contracts. This bill passed almost unanimously.
SB 156 prohibits an insurance company from including policy provisions to limit a consumer’s right to hire a public adjuster for property insurance claims.
SB 156 was a reaction to the increasing number of insurance companies offering or requiring endorsements on policies that include prohibitions on policyholders hiring public adjusters. In particular, this law does not apply to surplus line carriers. The bill was passed unanimously.
SB 106 Requires the insurer to provide the insured claim report upon written request:
In relation to a first party claim, the policyholder shall have the right to request and receive from the insurance company any part of the claim, including but not limited to written reports, estimates, bids, plans, measurements, drawings, engineering reports, contractor reports, statements, photographs , video recordings or other documents or communications unless the record created or used by the insurance company in its adjustment of the policyholder’s claim is legally privileged pursuant to RS 22:1964(14). An insurance company may retain confidential adjustment notes, logs, and any other documents or communications prepared in connection with a fraud investigation in accordance with RS 22:1964(14).
This bill passed unanimously as a common sense measure to clarify that insurers must turn over the entire claims record upon written request.
Finally, SB 96 provides that Louisiana Insurance Guaranty Association and Louisiana Citizens Property Insurance Company are not liable for bad faith penalties under LA RS 22:1892 from class actions and are immune from the 200% consequential damages penalty under LA RS 22:1973. This bill will be the subject of a future blog post discussing the twists and turns of how it was passed. In short, the final language was completely different from the original language, and as many attorneys debating this bill have read the law, Louisiana Citizens are still liable for bad faith penalties, reasonable attorneys’ fees and costs under LA RS 22:1892, Louisiana’s principal bad faith statute .