Gov. Jeff Landry and Louisiana's insurance chief clash over how to lower high auto rates

Two powerful state leaders have promised they are committed to bringing down high auto insurance rates shouldered by families and businesses alike, a challenge both have called "a crisis."

But Gov. Jeff Landry and Insurance Commissioner Tim Temple, both elected in 2023, during competing news conferences this week presented starkly contrasting visions of policy solutions that will translate to lower rates.

Temple said the primary reason auto insurance rates are high in Louisiana is that when drivers get into accidents, "we're more than twice the national average to file a bodily injury claim and more than twice to litigate."

"That's what the majority of the legislation is gonna focus on," he said at a news conference Thursday.

Most of the bills Temple is backing during the legislative session that begins Monday would put stricter limits on people's ability to sue over damages and how much money they can win in court — an effort pushed as "tort reform" by business interests and insurance companies.

"Will trial lawyers who sue for massive, excessive payouts attack our solutions and call them harmful to consumers? Probably so," Temple said. "From energy to insurance, I'm sick of how our state has historically sided with a few trial attorneys over the many citizens and job creators in Louisiana."

The package of bills will create "transparency, certain and predictability in our market," Temple said. That in turn will attract insurance companies to Louisiana and create competition and lowers premiums.

Just a day earlier, Landry announced an alternative slate of policies to lower auto insurance rates but urged a "balanced approach" he says would hold both insurance companies and trial lawyers accountable.

"Both sides have plenty of blame to go around," Landry said at his own press conference Wednesday. "Today I'm not here to help any lawyers, and I'm not here to help insurance companies. I'm here to help the citizens of the state."

Landry acknowledged a need to tamp down frivolous lawsuits and said the prevalence of minor injury claims "points to a cultural problem" of civil litigation connected to lawyer advertising.

But unlike Temple, who laid blame for high insurance rates squarely on Louisiana's civil law system and the trial lawyers, Landry also emphasized the role of insurance companies.

"Insurance coverage in this state is not an option," Landry said. "It is mandated by law, and our citizens are forced to pay for it. With that mandate comes great responsibility from those who cover them."

Landry said insurers have promised that policy changes would lead to lower rates, "but they have broken their word again and again." He also said insurance companies have lost public trust as they continue to bring in "record profits."

Landry angered many in the business community last year when he killed a major bill opposed by trial lawyers and weakened other measures before agreeing to support them.

Business backing Temple

At his Thursday news conference, Temple recruited two members of the trucking industry to speak in support of his plan.

"We feel as though the trucking industry is being attacked," said Jake Minner, a transportation manager at Bengal Transportation Services, which hosted Temple's news conference.

Minner cited "staged accidents" and "plaintiffs' attorneys frivolous lawsuits."

"We need our legislators to implement measures that will protect our family businesses from frivolous lawsuits," said Jared Varnado, president of Towing and Recovery Professionals of Louisiana, a trade association.

Temple's policy agenda is also backed by two other powerful groups: the Insurance Council of Louisiana, an insurance trade association, and the Louisiana Association of Business and Industry, the state's most powerful business lobby.

A statement from LABI said the organization has worked with Temple "on a comprehensive package of bills" that "will signal Louisiana is open for business."

"For far too long, we have failed to enact the reforms necessary to curb lawsuit abuse, prevent jackpot justice and attract more insurers to the state," the statement said. "The result has been a legal climate where lawyers cash in and Louisianans lose out, forcing them to shutter their businesses or relocate to friendlier states."

Temple worked over 20 years in various parts of the insurance industry and has consistently said free market principles will help ameliorate Louisiana's insurance woes.

Temple's legislative priorities

The insurance commissioner highlighted three policies he is supporting this year.

One is a "collateral source" bill by Sen. Caleb Kleinpeter that would put limits on recovering health care expenses during litigation. The recoverable amount would be the lesser of a "usual and customary rate" for the services or the amount actually paid to a health care provider — regardless of the source of funding for those payments.

Another is a legal concept known as "modified comparative fault."

Right now, if someone is injured but is partly responsible for it, the amount of money, or "damages", received is reduced in proportion to the "percentage of negligence attributable to the person." But the change backed by Temple wouldn't allow someone to collect damages if they are at least 50% responsible for the accident.

Also, "general damages" legislation Temple supports would cap money paid out for non-monetary damages such as pain, suffering and emotional distress at $5 million.

Policy debate

Temple took time to dispute details about Louisiana insurance regulation that he said Landry presented in a way that was "incorrect."

One is the power of the state's insurance commissioner to regulate insurance companies. Landry on Wednesday said Louisiana has the "weakest regulatory structure for holding insurance companies accountable."

On Thursday, Temple disagreed: "I have all the authority I need to deny a rate for being too high, and I exercise it," he said. "I don't approve rates that are too high — period."

Another issue related to insurance company disclosures.

"I'm supporting legislation to prevent these insurance companies from arbitrarily labeling information as confidential and proprietary," Landry said Wednesday without providing additional details about the measure. "They are preventing the public from seeing information that can assist the insurance commissioner in decision-making."

Temple disagreed with that.

Insurance companies are required to provide his office information upon request, confidential or not, he said. "They have to provide the information, and they do."

Addressing Landry's assertion that insurers are making record profits, Temple said the companies are leaving Louisiana because they are losing money here.

It was important to "correct the record" on the issues, Temple said, because "if we aren't on the same page about the problems, we can't begin to make real progress on the solutions."