Aims to regulate the roles of public adjusters and home improvement contractors concerning insurance claims.

Key provisions:

• Strengthens penalties for businesses engaging in unauthorized public adjusting, with fines up to $5,000 per violation.
• Prohibits public adjusters from acting as contractors, subcontractors, or providing construction, roofing, or repair services for insurance claims they have handled.
• Bans contractors and subcontractors from advertising, soliciting, or offering insurance claims handling, processing, or policy interpretation services before the insured initiates a property damage claim.

The bill seeks to eliminate conflicts of interest and prevent potential exploitation of policyholders during insurance claims.

Establishes the Louisiana Roof Registry within the Department of Insurance. This voluntary registry allows property owners and local governments to submit building permit information. The commissioner of insurance is authorized to set rules regarding the type of information collected and its intended use. The bill aims to improve documentation and oversight of roofing work in the state.

Proposes amendments to Louisiana Revised Statutes 22:1598(A) and (B) concerning insurance referrals and related compensation.

Key Provisions:

1.    Expanded Referral Methods:

o  Current Law: Allows unlicensed individuals to refer customers to licensed insurance professionals via telephone number.

o  Proposed Amendment: Extends permissible referral methods to include electronic mail addresses, websites, and direct referrals to insurance companies, including their affiliates or partners.

2.    Compensation Restrictions:

o  Current Law: Prohibits referral compensation in the form of sales commissions or based on the customer's application for insurance.

o  Proposed Amendment: Clarifies that compensation cannot be based on the referred individual's eventual purchase of insurance.

Implications:

These amendments aim to modernize referral practices by incorporating digital communication channels, reflecting current technological trends. Additionally, the bill seeks to ensure that referral compensation structures remain unbiased and not contingent upon the outcome of the referral, promoting ethical practices in insurance referrals.

HOUSE floor amendments [LINK]:

• Changes the bill to establish the "Stated Value Policy Act," applying specifically to insurers offering residential property policies.
• Removes the term "homeowner's" to broaden the scope to residential policies generally.
• Requires insurers to offer a "stated value policy" at the homeowner's or authorized agent's request.
• Sets coverage limits at no less than the property's assessed fair market value; however, allows homeowners without mortgages to insure at a stated amount of their choosing.
• Mandates the Commissioner of Insurance to provide clear, accessible information on the risks, limitations, and characteristics of stated value policies, regularly updating and disseminating materials to consumers.
• Makes technical corrections and renumbering for consistency.

Proposes the creation of the Stated Value Homeowner's Policy Act. This legislation would require property and casualty insurers in Louisiana to offer homeowners the option of a stated value homeowner's insurance policy. Under such a policy, the coverage amount is based on a value declared by the homeowner and agreed upon by the insurer, rather than solely on the property's market value.

Key provisions of the bill include:

·       Disclosure Requirement: Insurers must prominently disclose the availability of stated value policies in all policy proposals, agreements, and renewal documents provided to consumers.

·       Homeowner Obligations: To elect a stated value policy, homeowners are required to submit a written payoff statement from their mortgage holder and a mortgage certificate from the clerk of court indicating the status of any mortgages on the property.

·       Coverage Limits: The policy's coverage limit must be at least equal to the unpaid principal balance of any mortgage on the property.

·       Consumer Acknowledgment: Before issuing a policy with coverage limited to the unpaid mortgage balance, insurers must obtain a signed statement from the insured acknowledging the potential financial risks, including possible loss of home equity, in the event of a total loss.

The bill also grants the Department of Insurance authority to enforce these provisions and to adopt necessary regulations.

Proposes change to property insurance policies in Louisiana, specifically regarding mandatory binding arbitration.

Key Provisions:

1.    Mandatory Binding Arbitration Conditions:

o  Insurers can include mandatory binding arbitration clauses only if:

• The arbitration clause is in a separate endorsement attached to the policy.
• The policy includes an actuarially sound credit or premium discount for this endorsement.
• The policyholder signs a form, prescribed by the commissioner, acknowledging the rights forfeited, including the right to a jury trial.

2.    Arbitration Requirements:

o  Arbitration must occur within the judicial district where the insured property is located.

o  The arbitrator must be a licensed Louisiana attorney meeting specific qualifications set by the commissioner.

o  The arbitrator has the authority to award penalties, attorney fees, and other damages as permitted by law.

This bill aims to regulate the inclusion of arbitration clauses in property insurance policies, ensuring policyholders are fully informed and compensated for agreeing to such provisions.

The bill suggests changes to how the Louisiana Department of Insurance (LDI) manages fees charged to insurers based on their direct premiums. Right now, any unused or uncommitted money in the Insurance Fraud Investigation Dedicated Fund Account is returned to licensed insurers at the end of each fiscal year. The bill wants to keep that money in the account for future use instead. It also removes the rule that forces LDI to lower fee charges if they go above 5% of the previous year's total costs for running insurance fraud programs. These changes would start as soon as the governor signs the bill.

Updates Louisiana insurance law to improve how property and auto insurance claims are handled. It focuses on:

- Requiring proof that a deductible has been paid before certain claims are paid out.

- Setting stricter deadlines and increasing penalties for insurers that delay rental car coverage.

- Letting insured drivers challenge low vehicle value estimates using independent appraisals.

- Allowing insurers to require standardized proof of loss forms, with clear timelines and oversight from the insurance commissioner.

Prohibits insurance companies from factoring institutional advertising expenses into the calculation of insurance rates.

Key Provisions:

- Redefines "expenses" to exclude institutional advertising.

- Defines "institutional advertising expenses" as marketing not aimed at acquiring specific business or informing consumers.

- Amends rating standards to explicitly prohibit using such expenses when determining insurance rates.

- Aims to prevent insurers from passing on broad marketing costs to policyholders.

- Could potentially lower or stabilize insurance rates by limiting allowable expense categories.

- Effective January 1, 2026.

Encourages rate-setting practices focused on operational and consumer-relevant costs rather than brand promotion.

Implications:

Shifts the responsibility for initial medical payments from auto insurers to health insurance providers, potentially reducing auto insurance claim costs and promoting use of existing health coverage.

The House Committee Amendments to HB440 made the following changes to the original bill:

Revised Purpose Language

• Modified the bill's introductory language to focus specifically on "proceedings involving a claimant's failure to mitigate damages with use of personal health insurance."
• Removed broader references to the filing of medical claims.

Deleted Subrogation Provisions

• Stripped out language that would have allowed a claimant's health insurer to subrogate (i.e., seek reimbursement) against the automobile liability insurer.

Changed Reporting Deadline

• Shortened the time period for reporting accident-related injuries to an auto insurer from three years to two years.

Removed Mandatory Use of Health Insurance

• Deleted language that would have required a claimant to first file a medical claim with their private health insurance before seeking damages.

Renumbered Subsections

• Adjusted lettering/numbering to reflect the deletion of subsections (e.g., changed "C.(1)" to "B.(1)").

Overall, the amendments narrowed the scope of the bill to focus solely on creating a rebuttable presumption of failure to mitigate damages when a claimant does not use available health insurance, without mandating health insurance use or allowing insurer subrogation.

Summary: Amends Louisiana law to require injured parties in auto accidents to use their own health insurance before seeking payment from an auto liability insurer.

Key Provisions:

Primary Filing Requirement

• Claimants with private health insurance, Medicare, or Medicaid must first submit medical bills to their own insurer before turning to the auto insurer.

Subrogation Rights

• After paying the medical bills, the health insurer can seek reimbursement from the auto insurer.

Failure to Use Health Insurance – Legal Impact

• If a claimant doesn’t use their health insurance, there is a rebuttable presumption they failed to mitigate damages.
• This presumption can be challenged by showing a reasonable justification (e.g., insurance exclusions or limitations).

Damage Award Reduction

• If the presumption is not rebutted, the court may reduce the damages by the amount that health insurance would have covered.

Scope and Exceptions

• Applies to claims from accidents occurring on or after January 1, 2026.
• Does not apply to medical malpractice cases.

Implications: 

The bill increases the Department of Insurance’s revenue by raising licensing and renewal fees. These changes will slightly raise costs for insurance professionals and companies operating in Louisiana but will do NOTHING to reduce insurance costs.

Increased operational costs for insurers and adjusters: The higher fees apply to insurance producers, adjusters, and insurers. These are relatively modest increases, but they do add to the cost of doing business.

Possible pass-through to consumers: Companies may choose to offset these added costs by slightly adjusting premiums, fees, or service charges.

Proposes increases to various licensing and regulatory fees collected by the Louisiana Commissioner of Insurance. It targets producers, claims adjusters, public adjusters, and financial regulation fees for certain insurance entities.

Key Provisions: 

- Financial Regulation Fee: Increased from $1,000 to $2,000 annually for health maintenance organizations, insurers, and similar entities. 

- Producers' Licensing Fees: 

 - Application to add lines: $50 → $75 

 - Initial company appointment: $30 → $45 

 - Renewal of individual appointment: $20 → $35 

 - Producer renewal fee standardized at $75 (previously $50–$55 depending on lines) 

- Claims Adjuster and Public Adjuster Fees (Business & Individual): 

 - First-time applicant: $55 → $75 

 - Biannual renewal: $50 → $75 

Requires liability insurance premium discounts for commercial motor vehicles equipped with dashboard cameras and telematics systems.

Key Provisions: 

- Mandates insurers provide an actuarially justified liability premium discount for commercial vehicles using both technologies. 

- Defines eligibility and technical standards for dashboard cameras and telematics systems. 

- Requires policyholders to maintain system operation and provide proof upon request. 

- Insurers must verify compliance annually and report discount use, savings, and claim impacts to the insurance commissioner. 

- Commissioner must submit annual summaries to legislative insurance committees starting June 1, 2027. 

- Effective January 1, 2026.