Will legislation lower auto insurance rates?

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Tensions are escalating at the State Capitol as a legislative package that attempts to lower auto insurance costs in Louisiana nears its final stage of approval.

On Wednesday, the Senate advanced six of the more controversial insurance measures in a floor session that lasted late into the night. The debate included impassioned floor speeches and a heated clash between two lawmakers, both attorneys who stand on opposite sides of the issue.

Gov. Jeff Landry has signaled support for the proposals.

Only one of the bills cleared the chamber with bipartisan support, while the other five passed mostly along party lines with Republicans voting in favor of them and Democrats against. Those five are so-called "tort reform" proposals that give insurance companies certain protections or advantages in litigation, making it harder for accident victims to file successful lawsuits.

Tort reform legislation from previous years has failed to reduce auto insurance rates, though most Republicans, including state Insurance Commissioner Tim Temple, have said those measures were not strong enough.

This lack of results was among the points of contention during Wednesday's debate on Senate Bill 231, which took up most of the evening before the bill passed in a 27-8 vote. Sponsored by Sen. Mike Reese, R-Leesville, it would effectively reduce the money plaintiffs can recover for medical expenses in an auto accident lawsuit. The amount would be limited to what a plaintiff actually pays for care rather than what doctors and hospitals bill.

Supporters of Reese's bill argue it would provide medical billing transparency in personal injury lawsuits and prevent plaintiffs' attorneys from basing claims on artificially inflated medical bills no one actually pays.

Opponents argue transparency should apply to both sides. They pointed to a separate tort reform law that allows insurers to hide certain details related to their policyholder's coverage during a trial. Jurors could lower a monetary award if they believe an individual defendant — rather than an insurance company — will be personally on the hook for paying it, according to their viewpoint.

"Current law allows the plaintiff to lie to the jury, and it does not allow the defendant to tell the truth," Sen. Alan Seabaugh, R-Shreveport, an attorney whose practice includes insurance defense, said in support of the measure.

Sen. Jay Luneau, D-Alexandria, took issue over what he called Seabaugh's "ambush-type" strategy to tack on a late-hour amendment to Reese's bill that other senators had no time to review.

Luneau, a personal injury lawyer, said the amended bill was being rushed because Seabaugh had a conflicting court date Tuesday, when the Senate convenes next after a long Memorial Day holiday.

Standing at the Senate floor lectern within a foot of each other, Luneau and Seabaugh got into an exchange that quickly grew intense.

Seabaugh said the amendment, which was eventually adopted, requires judges and juries to be shown both the amount paid and the amount billed for medical expenses in auto injury cases, but confusion ensued over its text. The Republican senator, defending his amendment, said that Luneau, himself, had requested the provision.

When Luneau denied this and offered to withdraw the purported request, Seabaugh, in a raised voice, accused Luneau of lying.

"You were pounding the table, saying 'Let's tell the jury everything. Let's let them see the billed amount,'" Seabaugh said, pausing but drawing no response from Luneau. "You are just gonna come up here and blatantly bald-faced lie, and I'm not surprised."

The accusation drew quick intervention from Senate President Cameron Henry, R-Metairie, and prompted Senate Sergeant-at-Arms Louis Carral Jr. to swiftly approach the lectern, prepared to physically separate the two men.

"Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa! Guys, guys, come on!" Henry told the two senators. "There's a certain amount of decorum that we expect to have in the Senate. Y'all need to relax."

The amendment actually would have allowed defendants to try to lower jury awards following a trial

Later, Luneau delivered a lengthy speech against the bill, so long that he appeared to be mounting a filibuster to delay a vote. But he ultimately ceded the floor after detailing his comprehensive argument against tort reform.

Luneau cited data from the Louisiana Department of Insurance that shows there are more than 100 auto insurance companies in Louisiana, countering arguments that more insurers are needed in the state to create competition. Overall, they received $5.9 billion in premiums and paid out $3.4 billion in claims and losses, the date shows.

The five largest auto insurers in the state — State Farm, Progressive, Geico, Allstate and GoAuto — control 70% of the market, according to state data Luneau shared.

"This is a bad bill," Luneau said. "It's going to take money away from people who are legitimately injured, and it's not going to reduce automobile insurance rates. And we'll be right back here again with people screaming about the next round of tort reform we need to do."

Reese's bill next heads to the House for consideration.

Rate history disclosure

Only one of the five proposals, House Bill 148, sponsored by Rep. Jeff Wiley, R-Maurepas, received bipartisan support. Republicans counted for all of the no votes in the 26-9 outcome.

Wiley's proposal would require homeowner and auto insurance companies to show customers what they paid previously for coverage when sending out renewal notices. It would let customers see whether their rates have changed before they decide to extend their policy.

The bill would also give the state insurance commissioner power to strike down any insurance rate increase considered "excessive" or unreasonably high. Temple has lobbied against this provision, arguing it would force him to choose between rates based on real market conditions and the perception that he's lowering rates to improve his reelection chances.

Senate Republicans weakened the provision Wednesday when they inserted language into Wiley's bill that could let Temple approve excessively high rates as long as an insurer shows that they weren't chosen arbitrarily or randomly.

Another amendment to Wiley's bill allows the public to review documents insurance companies file with the state when seeking a rate increase, but only if the insurance commissioner determines the information shouldn't be kept confidential as a proprietary trade secret.

The measure will return to the House for a final vote on amendments before heading to the governor's desk.

Other insurance legislation the Senate approved included:

House Bill 450, by Rep. Michael Melerine, R-Shreveport, would end the Housley presumption, a standard of evidence explained in a 1991 Louisiana Supreme Court ruling that applies to auto accidents, medical malpractice and other injury lawsuits. In a nutshell, the Housley presumption says courts should assume a plaintiff's injuries resulted from the accident in question if they were in good health beforehand.

The bill received final approval in a 28-9 vote and awaits Gov. Landry's signature.

House Bill 434, sponsored by Rep. Jason DeWitt, R-Alexandria, would limit bodily injury claims by plaintiffs who did not carry auto insurance at the time of the accident. It would forbid them from recovering as much as $100,000 worth of damages.

The bill received final approval in a 28-9 vote and has been sent to the governor.

House Bill 431, sponsored by Rep. Emily Chenevert, R-Baton Rouge, would change Louisiana's comparative fault statute, which assigns a percentage of blame to each party in an accident and allows for the recovery of damages in proportion with those percentages.

Proponents argue comparative fault allows someone to recover damages for injuries sustained in accidents for which they are mostly at fault. Opponents say it is the fairest way to assign liability.

Under current law, if a court finds one party in a lawsuit is 60% at fault for an accident and the other party is 40% at fault, they would each be liable for their respective share of the damages and could file claims against each other for the remaining amounts. Under Chenevert's bill, anyone who is 51% or more at fault for an accident would get nothing.

The bill passed in a 28-9 vote and will return to the House for changes made in the Senate.

House Bill 436, by Rep. Gabe Firment, R-Pollock, would prohibit "unauthorized aliens" — defined in the measure as individuals illegally in the United States under federal immigration law — who are injured in car accidents from receiving compensation for pain, suffering and lost income. The proposal would still allow recovery for property damages and medical expenses. Auto insurance companies could still sell policies to unauthorized immigrants.

It cleared the chamber in a 27-10 vote and will return to the House for a vote on Senate amendments.

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