Prohibits insurers from reducing the limits of property and casualty insurance policies to fund defense costs. (8/1/20)
Impact
The enactment of SB 119 is expected to create significant changes in the insurance landscape within Louisiana. By limiting the inclusion of defense costs within the liability limits for certain types of insurance, the bill reinforces consumer protection against potential financial pitfalls when facing liability claims. It establishes clear parameters for when a waiver is permissible, including consideration of market competition and the nature of the insurance product, which may create a more predictable environment for both insurers and policyholders.
Summary
Senate Bill 119, introduced by Senator Robert Mills, seeks to regulate how defense costs are handled in property and casualty insurance policies. The bill explicitly prohibits insurers from reducing the limits of liability in these policies to accommodate defense costs, unless a waiver is granted by the insurance commissioner. This provision aims to ensure that the insured parties maintain their full liability coverage, without it being diminished by the expenses incurred in defending against claims.
Sentiment
The sentiment surrounding SB 119 appears to be largely supportive among advocates for consumer rights and insurance reform, who view the bill as a necessary measure to protect policyholders from having their coverage undermined by legal defense expenditures. However, there may be concerns from some insurers about the constraints placed on their pricing models and liability management. Overall, the discussion reflects a balance between ensuring adequate protection for consumers while maintaining a stable insurance market.
Contention
Notable points of contention regarding SB 119 revolve around the types of insurance policies included in the waiver provisions. While the bill categorically prohibits reductions in liability limits for personal lines, medical malpractice, commercial vehicles, and commercial general liability, there is a provision allowing waivers for several other categories like professional liability and cyber liability. This differentiation may lead to debates on the fairness and appropriateness of exclusions, especially in terms of how various sectors perceive their financial and legal risks in relation to insurance coverage.
An Act Concerning Electronic Posting Of Certain Documents By Insurers, Nonrenewal Or Cancellation Of Property And Casualty Insurance Policies, Federal Home Loan Banks And The Insurers Rehabilitation And Liquidation Act, Hypothecation Of Assets And Surplus Lines Insurance.
Relating to the regulation of certain political communications, a prohibition on electioneering by school district and open-enrollment charter school officials and employees, and the authorization of action by the commissioner of education against a school district that initiates certain actions or proceedings; authorizing an administrative penalty; creating a criminal offense.