Louisiana Senate Bill SB117

Louisiana 2017 Regular Session

• Introduced: 3/30/17
• Refer: 3/30/17
• Refer: 4/10/17
• Refer: 5/1/17
• Report Pass: 5/17/17
• Engrossed: 5/23/17
• Refer: 5/24/17
• Report Pass: 5/31/17
• Enrolled: 6/7/17
• Chaptered: 6/23/17
• Passed: 6/23/17

Caption

Requires certain insurance producers to maintain professional liability insurance. (8/1/17)

Impact

The implementation of SB 117 is expected to significantly alter the regulatory landscape for insurance producers. By requiring professional liability coverage, the bill aims to minimize the risks for consumers, ensuring that they have recourse in cases where insurance producers fail to provide adequate service. This accountability could lead to higher standards within the profession, as producers may be more diligent in their practice to retain their insurance coverage. Additionally, the stipulation that failing to maintain the required insurance constitutes an unfair trade practice adds a layer of enforcement that could deter negligence among providers.

Summary

Senate Bill 117 mandates that certain insurance producers in Louisiana maintain professional liability insurance for the protection of their clients. This bill modifies statutes regarding insurance producers, particularly focusing on independent producers—those not employed by a specific insurance company—and lays out requirements for liability insurance or errors and omissions policies. The intent is to enhance consumer protections and ensure that insurance producers are financially accountable for any errors or omissions in their professional services, thereby fostering greater trust in the insurance industry.

Sentiment

Overall, the sentiment surrounding SB 117 is largely positive among consumer advocacy groups, as they view the bill as a step forward for consumer protection within the insurance sector. Supporters argue that having mandatory professional liability insurance will lead to better service quality and more responsible conduct among insurance producers. However, there may be some concerns from insurance producers regarding the financial implications of obtaining and maintaining such insurance, which could lead to increased operational costs and potentially affect smaller firms negatively.

Contention

While SB 117 has garnered broad support, it also brings with it points of contention, particularly regarding its potential impact on smaller insurance producers. Some stakeholders argue that the costs associated with professional liability insurance could disproportionately burden independent producers, potentially driving them out of business or leading to fewer options for consumers. Moreover, the bill raises questions about the adequacy of coverage required and whether existing insurance producers are adequately prepared to meet these new standards without significant cost increases.