What was called the "most important bill" of the session — one promoters said would lower Louisiana’s high auto insurance rates — fell apart after members of a Senate committee showed that the legislation was what opponents contended all along: an effort to tilt the court system in favor of the business and insurance communities at the expense of people injured in car wrecks.
No evidence was presented that the Omnibus Premium Reduction Act of 2019 would reduce the cost of auto insurance. “It’s just not going to do that,” said Democratic state Sen. Jay Luneau, an Alexandria lawyer and member of the Senate Judiciary A committee, which is stocked with Republican and Democratic lawyers protective of the state’s legal system.
A state Senate panel Tuesday rejected what a business group called the most important bill of the session after senators complained that despi…
Senators brought out that the legislative task force formed to get at the heart of high rates looked at several factors, like distracted driving and poor roads. But their House Bill 372 focused on four technical changes to the legal system that had been long sought by business and insurance.
“They cherry picked,” said Robert Kleinpeter, a Baton Rouge lawyer who represents injured people, aka trial lawyer, and a member of the task force who said he was frustrated by the refusal to include other possible causes for high prices in the legislation.
HB372 proposed extending from one year to two the deadline for filing a lawsuit; lowering the amount of damages sought to qualify for having the dispute decided by a jury instead of a judge, called jury trial threshold, from $50,000 to $5,000; limiting recovery for injuries to what the party personally paid; and keeping from the jury the existence of the defendant’s auto insurance policy and the name of the insurer.
Supporters said the four changes would bring Louisiana in line with the rest the country and promote negotiations over trials. The state has among the nation’s highest bodily injury claims decided in courtrooms.
All hope for supporters ended when Republican Sen. Ryan Gatti, a lawyer in Bossier City, began waving an analysis by actuaries, the accountants and economists who estimate the risks that set policy premium rates. Though part of the task force’s archives, the report had not been included in the presentation.
Louisiana High Auto Rates Task Force Report 02/19/19
The analysis went over each of the four points and found no definitive cost savings. “There was much uncertainty on whether average jury awards would actually be less than average bench awards,” the task force’s actuarial subcommittee determined.
A Legislative Fiscal Office report determined that the number of jury trials would increase under the system proposed in the bill.
River Ridge Republican Rep. Kirk Talbot, who had shepherded HB372 through the process, said he didn’t include other issues because other lawmakers wanted to sponsor those bills. He also never said the package would directly lead to lower prices, as many of his supporters did. Rather, Talbot argued the changes would reduce the number of trials over bodily injury claims and promote settlements that would lower costs for the insurance companies. If costs fell, the bill also included language that would require rates to go down correspondingly.
After the committee rejected his legislation, Talbot said the state’s high auto insurance rates would become a major issue in this fall’s gubernatorial campaign.
Almost on cue, Congressman Ralph Abraham, one of two GOP challengers to Democratic Gov. John Bel Edwards’ reelection, went on the offensive. “Rep. Kirk Talbot's bill to lower car insurance rates for every individual and business in Louisiana died because Gov. Edwards puts his trial lawyers’ buddies over our families,” Abraham said in a Facebook post Wednesday.
Longtime Insurance Commissioner Jim Donelon had thrice pushed similar legislation and failed: “We were hopeful this time because we have reached the crisis point.”
That said, Donelon noted that Louisiana’s court scene had long ago been baked into the auto rates. Though starting from a higher level, the annual 1% rate increases over the years were comparatively modest. Then about five years ago when national highway death rates hit record levels, the rates started going up dramatically nationwide.
Donelon blames the iPhone.
Tort reform is history for this session, although Donelon holds out hope that a “distracted driving” measure by Republican Rep. Mike Huval, an insurance agent from Breaux Bridge, will pass and help with the rates.
House Bill 229 would widen the definitions to include listening as well talking on a wireless telecommunications device. It also would eliminate the myriad exemptions drivers can use to defend themselves if cited under current laws for driving while using a cellphone.
The measure has been on the House agenda since last month and is scheduled for debate on Tuesday.