Louisiana House Bill HB423

Louisiana 2020 Regular Session

• Introduced: 2/27/20
• Refer: 2/27/20
• Refer: 3/9/20

Caption

Provides for the prescriptive period for bad faith insurance claims

Impact

The implications of HB 423 extend across the insurance sector, promoting a more definitive timeline for claim resolution. By limiting the prescriptive period, the bill is expected to streamline the claims process, reducing the backlog of cases and encouraging quicker resolutions. However, this could also impact individuals who may feel rushed to file claims without allowing adequate time to assess their situation post-injury or loss, potentially leading to grievances being left unresolved due to time constraints.

Summary

House Bill 423, sponsored by Representative Mike Johnson, seeks to establish a clear prescriptive period for claims of bad faith against insurance providers. Specifically, the bill enacts R.S. 22:1973(E), setting a two-year limitation for actions brought against insurers for failing to uphold the duty of good faith and fair dealing. This provision aims to provide clarity to both insurers and insured parties regarding the timeframe in which claims must be filed, commencing from the date the injury or damage occurs.

Sentiment

The sentiment surrounding HB 423 appears to be predominantly supportive from the insurance industry's perspective, as it provides a clear framework for liability and expected timelines for claim actions. Proponents argue that this clarity benefits the industry by minimizing frivolous claims and reducing uncertainty regarding potential future legal actions. Conversely, critics may raise concerns about the fairness of imposing such limits on individuals who may need more time to work through complex insurance claims, particularly in cases of severe damage or injury.

Contention

A notable point of contention regarding HB 423 is the balance between protecting the interests of insurance companies and ensuring that consumers have sufficient opportunity to seek redress for potential breaches of good faith. While supporters of the bill emphasize the need for a structured timeline, opponents may contend that imposing a two-year limit could disadvantage consumers, particularly those who are unaware of their rights or those facing challenges in navigating the insurance claim process. This tension underscores broader discussions about consumer protections and industry regulations in the insurance landscape.