Amid Louisiana's insurance crisis, lawmakers aim to loosen barriers for wary companies

State Sen. Kirk Talbot on Monday outlined several solutions the Legislature will consider this session to mend Louisiana's battered property insurance market, including changes to some restrictions that he said have soured insurers on the state.

Talbot, the chair of the Senate's insurance committee, told the Baton Rouge Press Club Monday that some lawmakers hope to amend a law that bars insurers from dropping policyholders who have been on their rolls for more than three years, though he didn't detail possible changes.

Talbot also plans to file a bill that would make the role of state insurance commissioner an appointed position, rather than an elected one. Doing so would give the governor more oversight over the position, and could open it up to someone with a high level of insurance expertise, he said.

Talbot said state law presently tilts in favor of protecting policyholders. But lawmakers should instead focus on easing market conditions for firms leery of practicing here, Talbot said, as more than a dozen companies since 2020 have gone belly up or left the state on the heels of several destructive storms.

"The only way we're going to have affordability in the insurance market in Louisiana (is) competition," said Talbot, R-River Ridge. "We need companies fighting over everybody in this room, fighting over their policies to try to get their business, and we simply do not have that right now."

Lawmakers will weigh a slew of bills aimed at ameliorating the insurance crisis when the legislature convenes on April 10. Some proposals already filed would help homeowners directly, like a pair of bills tailored to strengthening more roofs to higher standards.

Talbot's views could draw support in the GOP-controlled state legislature. A series of pro-industry insurance bills have already been filed or discussed publicly.

One proposal from Insurance Commissioner Jim Donelon would strip policyholders of the right to collect attorneys fees if they sue their insurers — a measure Donelon argues could preemptively halt a tidal wave of insurance litigation like one seen in Florida and, in doing so, draw more insurers to the state.

Consumer advocates have slammed Donelon's proposal, with the insurance advocacy group Real Reform calling it an effort that "cheats storm victims." That proposal is modeled after a contentious Florida law that drove a wedge between different factions of the state Republican party there.

Meanwhile, the insurance lobby has long sought to overturn the rule lawmakers are eyeing that bars insurers from dropping policyholders for any reason, save insolvency, after three years. It's unclear if legislators plan to repeal the law or simply amend it to create exceptions.

"Insurance companies want that freedom, or that flexibility, to shed risky policies after they've had major catastrophic events… That is something that is affecting availability, which is in turn affecting affordability," Talbot said.

In crafting policy, even conservative lawmakers are weighing the politics of siding with industry against complaints of constituents who are fed up with rising insurance premium costs.

"The quickest way to run people out of this state is to make their living cost unaffordable," said Rep. Blake Miguez, R-New Iberia and chairman of the House Republican Caucus. "What incentivizes them to stay here besides the good food and the great people we have?"

The insurance crisis emerged on the heels of the destructive Hurricanes Laura, Zeta, Delta and Ida, which struck Louisiana in 2020 and 2021 and left thousands of homes with varying levels of damage. More than a dozen Louisiana insurers have since gone insolvent or left the state, leaving over 100,000 households with no place to turn for insurance besides Citizens, the state's insurer of last resort.

Officials have tried to right the ship by enticing companies to write policies here with millions in incentive payments. The legislature approved $45 million for that purpose in a special session earlier this year.

Presiding over the crisis was Insurance Commissioner Jim Donelon, who said recently that he will not seek re-election this fall.