Landry's approach to lower insurance rates could cast his political fate

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Gov. Jeff Landry, a conservative Republican, drew praise from liberal Democrats after he railed against large corporations and called for stricter regulations on the insurance industry — an uncommon spectacle that suggested the governor is staking his political fate on lowering policy rates.

Testifying in a nearly two-hour exchange Wednesday with lawmakers on the House Insurance Committee, Landry urged his fellow Republicans to break from their traditional alignment with insurance companies and vote in favor of House Bill 576, a Democrat-backed proposal that's part of an agenda Landry has described as a "balanced approach" to the decades-old rate debate between personal injury lawyers and the insurance companies they sue.

Louisiana pollster John Couvillon said Landry can't really afford not to take on the insurance issue because policy premiums are by far the most overwhelming concern of voters and likely outweighs any risk associated with bipartisanship.

"If he can bend the cost curve on insurance rates, that's something he can take credit for," Couvillon said. "Who he works with to do it is much more insider baseball. I don't know if that kind of perception would matter with the average Louisiana voter who's really more concerned with high insurance rates."

Landry has included multiple bills on his agenda that target both insurance companies and trial lawyers, but House Bill 576 could be part of a larger political calculation that affords him more opportunities for reward than risk.

Cosponsored by moderate Democrats Robby Carter of Amite and Chad Brown of Plaquemine, the bill would give the state insurance commissioner the power to prohibit any insurance rates considered "excessive" during any market conditions. Currently, the commissioner can only exercise that power after holding a public hearing in which someone proves that the insurance market lacks competition.

The bill applies to all lines of insurance, though Landry has focused his attention mostly on auto and property insurance rates. Spikes in homeowner premiums occurred after a series of destructive storms starting in 2020 and have been mostly limited to the coastal regions. Premiums for auto insurance have long been elevated across Louisiana, and lawmakers have struggled to identify a clear reason why, believing the problem is rooted in policy decisions.

Landry and Brown sat shoulder-to-shoulder Wednesday as they presented the measure, which includes an amendment the governor said he wrote himself and modeled after a law in Mississippi. Louisiana's neighbor has average auto insurance rates that are nearly half the amount of Louisiana's, according to U.S. News & World Report.

Brown's bill cleared the committee in a 13-4 vote but still has a ways to go before final passage, and Landry's office would not say if the governor will continue to shepherd the bill over each subsequent hurdle.

"It certainly helped that the governor was there to support it," Brown said in an interview, adding that he hopes Landry will testify at subsequent hearings. He thinks the governor has sent a clear enough message to Republican lawmakers about what they need to vote for.

Landry paired his appearance with rhetoric that potentially puts him at odds with his own party, which has traditionally favored pro-capitalist narratives.

"We're losing sight of something that's been going on in this country for quite some time, and that is consolidation … That is exactly why we need this law," Landry said, "because we have allowed corporations to control large market shares in violation of Sherman [Antitrust Act] again and again."

Congress passed the Sherman Act in 1890 to establish rules for competitive trade and prevent unfair monopolies.

Rep. Edmond Jordan of Baton Rouge and New Orleans Reps. Matt Willard and Mandie Landry, all Democrats, thanked the governor for putting effort into the issue and trying to hold insurance companies accountable. They joined Landry in arguing tort reform legislation, which is based on the idea that trial lawyers have an unfair advantage in court, has not worked.

One of the four Republicans who voted against the Brown bill, Rep. Jay Gallé of Mandeville, told his colleagues it would undermine "all free market principles" of supply and demand and ultimately discourage new insurance companies from coming to Louisiana. He argued it would give the insurance commissioner sole authority to arbitrarily decide rates.

Brown clarified the commissioner would only be able to approve or reject rates, not set them. The governor argued Louisiana could never have a "free market" for insurance because the law requires drivers and homeowners to have coverage.

"The free market rules do not apply when the consumer is mandated to buy something," Gov. Landry said.

In a later interview, Gallé said he was in an uncomfortable situation having to choose between supporting his party leader versus following his conscience and beliefs.

"When it is a quote-unquote 'governor's bill,' the pressure is already on you, and when he takes the time to come and sit in the room that adds a little more pressure," Gallé said. "I hated to go against the governor, but at the end of the day I had to go with what's best for my district."

Whether the Brown bill would even have an impact on insurance rates is questionable. Insurance Commissioner Tim Temple, who is opposed to it — and in a public feud with the governor — has said actuaries in his office have reviewed high policy rates in Louisiana and found them to be justified based on losses insurers have accrued in defending lawsuits.

The governor's bill would back the commissioner into a corner, forcing him to choose between rates based on market data or rates artificially suppressed for political reasons, Temple said.

The governor has cast suspicion on Temple's opposition to the bill, repeating an argument Rep. Mandie Landry made earlier in the hearing when she suggested to the governor that politicians usually don't shy away from gaining more power.

"I've never seen a politician not want more power," the governor said.

At the same time, some claim the governor is focused on Brown's proposal because he hopes giving more power to Temple would allow him to blame the commissioner if rates fail to improve. Temple's office pointed to Gov. Landry's April 9 discussion with conservative radio host Moon Griffon in which the governor suggested as much.

"If we … implement that here, giving our insurance commissioner those tools, and if the rates don't go down, it's on him," the governor told Griffon.

But according to Couvillon, deflecting blame away from the governor would be a more difficult task than most people realize. Voters are much more familiar with the governor than the insurance commissioner, so it would take a very effective messaging strategy to deflect any blame.

"Voters tend to hold the governor accountable for things like high insurance rates whether it is a deserved measurement or not," Couvillon said.

If Gov. Landry's agenda has little effect and coverage premiums remain about the same, there's enough time to try to recast his political fate and convince voters to overlook it before his re-election bid in 2027. The greatest risk in the governor's calculation lies in the possibility that insurance rates continue to increase, which would be a much bigger problem for Gov. Landry, Couvillon said.

On the other hand, the insurance commissioner has said repeatedly previous reforms have started having an impact on homeowner coverage lines. On Wednesday (April 16), Temple told the committee eight insurers have filed rate decreases for 2025.

"It is working," Temple said. "Rates are coming down."

House Bill 576 will next move to the House floor for consideration.

The Louisiana Illuminator is an independent, nonprofit, nonpartisan news organization.