Donelon opposes a bill that would let insurers raise rates without approval
Supporters say the change would help attract more insurers
NEW ORLEANS (WVUE) - Insurance Commissioner Jim Donelon is blasting a bill that would let insurance companies raise rates without first getting approval from him or future insurance commissioners.
“It’s what the industry is promoting all across America, which is absolute deregulation of insurance rates,” said Donelon in a one-on-one interview with FOX 8.
Donelon says if HB 489 becomes law, it would strip away the La. Department of Insurance’s authority to review and approve hikes, something he believes is critical to protect property owners.
“If we can’t regulate rates, then frankly, that’s a vital part, an essential part of making sure that insurance is affordable and available and fairly implemented across all policyholders,” said Donelon.
Rep. Mike Huval, R-Breaux Bridge and Sen. Kirk Talbot, R-River Ridge, authored the legislation, which sailed out of the House Insurance Committee earlier this week. “Insurers will not do business in Louisiana if they cannot charge the premiums they think need. A free and competitive insurance market will regulate prices much better than bureaucratic government regulation,” said Huval during the hearing.
Talbot issued a statement to FOX 8 for this news story:
“I believe that the bill to repeal the commissioner’s ability to approve insurance rates is something that is common in most other states in this country, and has some merit and deserves discussion and debate.”
Donelon has partnered with Huval and Talbot on other insurance bills but says it cannot support HB 489. “They would substitute the prior approval by the insurance commissioner with what’s called “Use-and-File,” said Donelon.
Huval said the insurance commissioner could challenge the rates in certain circumstances.
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“HB 489 will still allow the commissioner of insurance to disapprove filings that are unfairly discriminatory or violate Louisiana law,” he said.
But Donelon says that is not good enough given what is at stake for policyholders.
“After the fact, if they implement something that is clearly violative of the law then the regulator could take them to court to undo what they implemented.”
He says that would make it more challenging to undo rate increases insurers put into place independently.
Donelon characterizes the bill as one of the worse this legislative session.
“It’s the second-to-worst bill in this session relative to property insurance,” he said.
The other bill Donelon says, is one that would do away with a rule barring insurers from dropping coverage at will for customers who have had policies for three years.
“We are the most vulnerable hurricane state in America needing that protection,” he said.
And he is looking into complaints that insurers who recently received millions in state grants are not writing new wind and hail policies as required.
‘I’m hearing anecdotally from agents and consumers that they are saying they’re not going to start writing new business until after the hurricane season. I am very unhappy about that and will have some serious conversations with those companies,” said Donelon.
Meanwhile, for Hurricane Ida victims who feel they weren’t treated fairly by their insurance company, Donelon says time is running out to push back.
“August 29th is the last day for policyholders to be able to protect their right to get full compensation by filing suit,” said Donelon.
According to Donelon, the August date is also the deadline for filing supplemental claims.
“Between filing a supplemental claim and filing suit if they’re not happy over the next four months, they should file a complaint with us, we get results oftentimes.”
To file a complaint with the La. Department of Insurance, call 1-800-259-5300 or go to www.ldi.la.gov.
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