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MONTHLY REPORT
Volume 13, Issue 1
January 2013


Members

Commissioner Jim Donelon
Theodore "Ted" Haik, Jr., Chair
Jeff Albright, Vice Chair

Raymond J. Aleman, Sr.
Lee Ann Alexander
J.E. Brignac, Jr.
Paul Buffone
Stephen F. Campbell
Anne Cassity
Sheriff Greg Champagne
Representative Greg Cromer

Manuel DePascual (Alternate)
Louis G. Fey, Jr.
Michael Guy
Lance "Wes" Hataway
Ron Henderson
Senator Eric LaFleur
Scott Landry
LTC John A. LeBlanc
Ann Metrailer (Alternate)
Robert Moorman
Senator Dan "Blade" Morrish
Chris Roy, Jr.
Representative Kirk Talbot
Earl Taylor


Staff


Terrell B. Moss, Director

David Evans,
Supervisor/Research Analyst

Amy Deason, Administrative Assist./Research Analyst

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NEWS BRIEFS

Donelon Serves as 2013 NAIC President

Louisiana Insurance Commissioner Jim Donelon became the new president of the National Association of Insurance Commissioners (NAIC) effective January 1st following a year’s service as President-Elect.

“I am pleased to have this opportunity to serve the NAIC and the citizens of Louisiana in this capacity,” said Commissioner Donelon. “Louisiana is a significant consumer of insurance in the national, and even international, marketplace. Through this position, I will be able to engage in the insurance debate on a leadership level and place Louisiana at the forefront in the study and development of insurance regulation.”

Ben Nelson Named as NAIC CEO

Ben Nelson, former U.S. Senator from Nebraska, and a former two-term governor and insurance commissioner in his state, has been named CEO of the NAIC. 

Mr. Nelson will be the primary advocate and chief spokesperson in Washington, D. C. for the NAIC and its members. 

“Sen. Nelson’s impressive credentials and deep knowledge of state insurance regulation are simply unmatched,” said NAIC President Jim Donelon in a statement.

Additional Claim Payments

Consumers in Louisiana received an additional $6.4 million in insurance claims payments during 2012 through the efforts of the Louisiana Department of Insurance. 

“The LDI staff has worked to secure these funds for consumers when the case indicates the necessity for additional insurance settlements.  Our knowledgeable staff can assist consumers to determine when to file a complaint against a company, or help them resolve disputes with insurers,” said Commissioner Donelon.

Dispute Settlements (January 1 – December 31, 2012)

Insurance Product

Inquires

Complaints Filed

Funds Recovered

Life & Annuity

313

382

$2,249,709.52

Property & Casualty

3,816

1,873

$3,337,205.01

Health

798

819

$   836,392.64

TOTAL

4,927

3,074

$6,423,307.17

Consumers should not hesitate to contact the LDI for assistance in determining what options are available to them when they are unsatisfied with the resolution of a claim.


Annual Policy Review

The start of a new year is often a time for reflection and review. In consideration of your most valuable possessions – auto, home, and personal property – it is a good time to review your insurance coverage, as well. An annual review of your insurance policies will familiarize you with your coverage and provide you with the opportunity to take stock of your belongings and account for any changes that may have occurred during the preceding year.

Here are a few life changes to consider and to discuss with your insurance agent:
Automobile Policy –

  • If you paid off your vehicle loan or you are driving an older vehicle, you may want to consider a change in the type or level of non-liability coverage.
  • If you have a newly licensed teen driver in your household, you will want to be sure that you have added them to your policy.

Homeowners Policy –

  • If you have started a home business, you will want to make sure that you have proper coverage.
  • If you have remodeled or installed a Jacuzzi, pool or trampoline, you will want your coverage to reflect the increased risk.
  • If you have made any major purchases or received major gifts (jewelry, boat, motorcycle, etc.) you may need to adjust your coverage.

The unusually heavy rains this month are a reminder of the risk of flooding and the need for homeowners to purchase flood insurance. Commissioner Donelon has consistently urged Louisiana residents to buy flood insurance, suggesting that all homeowners secure such policies. Your insurance agent can assist you in obtaining a flood insurance policy.

Usage-Based Auto Insurance Growing

According to reports in recent months, usage-based auto insurance (UBI) is a rapidly developing sector of the market that will continue to grow and fundamentally transform the auto insurance industry. Currently, eight of the top 10 insurers are reported to have UBI programs or pilots with the expectation that within five years 20 percent of all vehicle insurance will incorporate some form of UBI.

UBI basically relies upon a data recorder placed inside the vehicle to monitor and report driver behavior, which in turn is used as an element in pricing the driver’s auto insurance. Monitored and reported behavior may include miles driven, time of day, where the vehicle is driven, rapid acceleration, hard braking, hard cornering and air bag deployment. The idea is to reward the customer with a premium discount for his actual good or preferred driving behavior rather than rely solely upon traditional pricing, which is based on actuarial studies of aggregated historical data to produce rating factors that are then applied to the individual.

According to a recent survey by Towers Watson, approximately two-thirds of the respondents said they would be willing to change their driving behavior in order to save 10 percent on their insurance costs. Seventy-six percent of those would be willing to accept a device in their cars that would monitor their driving.

Representatives of Progressive made a presentation to the LPCIC in December 2010, during which they explained that UBI not only provides a premium savings to safe or low-mileage drivers, but can be used by the driver or the parents of a teen driver to monitor and improve driving behavior.

The LPCIC will continue to follow UBI and its impact on auto insurance rates and driving behavior in Louisiana, which may include an update from Progressive at a future meeting.

Meeting Notice

LPCIC will hold a meeting on Tuesday, February 5th at 1:30 pm at the Department of Insurance in the Plaza Hearing Room.