Louisiana ushers in controversial changes to address insurance crisis. See what passed.

The package of bills comes amid an insurance crisis that saw rates skyrocket after a dozen regional insurers went belly-up and several bigger insurers retreated from the market. The dynamic of rising rates and insurers fleeing mirrors that of other states at most risk from extreme weather because of climate change.

The bills Landry signed were pushed by Insurance Commissioner Tim Temple, a fellow Republican, and they represent the GOP leaders' preferred strategy to make Louisiana more attractive to insurers. They say that will bring more companies, and that more competition will stabilize or lower rates.

The Legislature appears poised to reject efforts pushed by consumer groups that would mandate insurance discounts for certain policyholders. Republican legislators rejected one bill, by Rep. Matthew Willard, D-New Orleans, to suspend the 10% surcharge paid by policyholders of Citizens, the state-backed insurer of last resort. Another bill by Sen. Royce Duplessis, another New Orleans Democrat, would have mandated bigger discounts for people who strengthen their roofs. It was watered down Tuesday, though advocates still hope it will bring relief.

Temple has hesitated to promise rates will go down as a result of his package, or say when customers might feel the effects. One insurance executive recently said it will likely take two years for the effects to materialize, but the industry hopes that the reinsurance market, a key driver of costs, will look favorably upon the changes. Temple has told legislators throughout the process to "blame me" if it doesn't work.

Promise to 'rebalance'

The officials at Tuesday's bill signing conceded the strategy was unpopular. A poll commissioned by the Times-Picayune found voters disapprove by a wide margin of one key bill in the package, to eliminate the longstanding rule that insurers can't drop policyholders after three years.

Landry, who has not made insurance a priority, emphasized the package of bills was Temple's idea. If it doesn't bring rates down, he said he's committed to pushing for more changes in the future.

"This package is a set of bills that came recommended to us by the insurance commissioner in hopes of getting rates lower," Landry said. "If we don't see those rates lowered, I know all of these people as well as the commissioner are committed to continue to work on this at every step to make sure we get it right."

Temple, a former insurance executive, vowed the bills would "rebalance" the property insurance market by making the state more attractive to insurers.

"Our hope is this package of bills will create more balance in the law and in the market such that we can drive the cost of property insurance down and make it more affordable for our citizens," Landry said.

The package drew opposition from consumer and housing advocates, who worry that more homeowners will be dropped by carriers at a time when rates are increasingly unaffordable.

Andreanecia Morris, head of HousingNOLA, said her organization delivered a petition to Landry asking him to veto the bills.

Morris said the Legislature should focus on lowering the costs of Citizens and building stronger homes to mitigate the increasing risks from climate change, which is driving tumult in insurance markets around the world.

"We think this is nowhere near good enough to address this crisis," Morris said, adding the insurance industry was being given "corporate welfare."

Package signed

Landry signed four bills Tuesday. One, by Willard, extends the state's fortified roof grant program, which was set to expire next year.

The other three are aimed at making life easier on insurers. HB611, by Rep. Gabe Firment, R-Pollock, phases out the state's unique "three-year rule," which barred insurers from dropping policyholders or raising their deductibles if they had been a customer for three years. Companies will now be able to drop 5% of their longtime customers per year, and more if Temple signs off. The three-year rule is no longer in effect for customers who get on a policy after August of this year.

SB323 by Sen. Kirk Talbot, R-River Ridge, would redo how claims are handled for homeowners insurers, giving them more time to pay and allowing a "cure period" to resolve issues with homeowners. The bill was a compromise with plaintiffs' lawyers, which has long stymied GOP efforts to make it harder to sue insurers.

And SB295 by Sen. Heather Cloud, R-Turkey Creek, allows insurers to increase rates without prior approval from the Insurance Department.

Ben Riggs, head of the advocacy group Real Reform Louisiana, said Temple's package is "anti-consumer" and "further stacks the deck in favor of big insurance companies."

"Commissioner Tim Temple's uncompromising, pro-industry legislative agenda gutted vital consumer protections, leaving Louisianans more vulnerable not only to storms but the whims of big insurance companies," he said.

Temple and the business lobby sought more intense changes to the laws governing how and when policyholders can sue insurers. Several bills, dealing mostly with auto insurance, were watered down or killed in the state Senate.

Landry has suggested he's not in favor of such changes. The governor, who received support from plaintiffs' lawyers in his bid for governor, said Tuesday that he was upset in recent years to see homeowners who paid their premiums for years face lengthy delays to get their claims paid.

Homeowners have put insurance near the top of the list of priorities ever since rates began skyrocketing in 2022 and 2023. The poll commissioned by The Advocate | The Times-Picayune last month found it was the No. 2 issue for voters, who also gave poor marks to Temple and Landry's handling of the crisis.