Gov. Jeff Landry put the state’s insurance providers in crosshairs while testifying before the Louisiana House Wednesday morning, demanding solutions for the state’s nationally high automobile insurance rates.
Landry advocated for House Bill 575, sponsored by Rep. Robber Carter (D-Amite). The far-reaching bill would change how insurance rates are regulated, including giving the state’s insurance commissioner the authority to reject rates in competitive markets. According to the bill, it includes rejecting rates that are considered excessive, inadequate, or unfairly discriminatory.
In layman’s terms, the bill would give the state’s insurance commissioner more powers to reject auto insurance rates deemed excessive or too expensive with the intent of forcing insurance providers to lower prices.
It would also prohibit the commissioner from rejecting any rate that is actuarially justified.
Actuarial justification is an insurance term pertaining to rate filing, essentially meaning that the insurer’s revenue expectation, based partly on the file rates and existing rating system, is materially equal to the insurer’s expected future costs.
Landry said the bill’s language was partially modeled after legislation recently passed in Mississippi.
“What we are here to talk about today is giving the insurance commissioner the ability to hang a Sword of Damocles’ over insurance companies so that when we make the adjustment in the tort law like y’all have done dozens and dozens of times, our people get the benefits that we claim and debate and say they should. The bill is not designed as a hammer for the insurance commissioner. The bill is designed as a safeguard to ensure the promises that you are making to your constituents can be fulfilled,” Landry said.
“If you want to make all those tort changes and watch the rates go up and get blamed again and again and again, then don’t pass the bill.”
According to Insure.com, Louisiana is the most expensive state for car insurance in the U.S., with an average auto insurance premium of $2,883 per year. The nation’s lowest average premium for full coverage is Maine with an annual cost of $1,1175.
Landry said state legislatures have attempted to reform and bring auto insurance rates down across the state multiple times to no avail.
“We are consistenly top three in the nation in the highest auto insurance rates in the country, even though we have adjusted for those that were here before this term, our tort law again and again at the behest of the very industry that has put us in the top three highest auto insurance rates in the country and yet the rates still go up and that’s unacceptable,” Landry said.
“So as I looked through the data and the legislative history, I said, ‘Well, while we don’t try a balanced approach and let’s see how much chaos we can cause.’ It seems like we got everybody upset, that means we’re pretty much on a pretty good road,” Landry said.
Louisiana Insurance Commissioner Tim Temple testified following Landry and said that he opposes the bill. Temple said that changes made to state insurance policies last year are only now beginning to take effect, explaining that eight insurance companies in the state have already filed to lower rates for 2025.
Temple said the current reforms were working.
“I would encourage you don’t upset the progress that we’ve made by signaling to the market that we’re going to try something vastly different,” Temple said.
The regular legislative session continues through June 12th. If interested in watching the proceedings live, people can do so here.
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