Louisiana Property and Casualty Insurance Commission:
New Regulatory Reforms Aim to Improve Environment
Released: October 12, 2007
There has been considerable discussion in the national press about
the new insurance environment being created by the legislation
adopted in Louisiana and in our sister coastal states following
the catastrophic hurricanes of 2005. While we are finally seeing
signs of a better insurance climate in Louisiana, we continue to
receive unwarranted and undeserved criticism from some in the insurance
industry, despite the pro active approach taken by state officials
to reform our insurance market, according to Ted Haik, chairman
of the Louisiana Property and Casualty Insurance Commission.
The Commission, whose 22-member board is composed of national
and state trade associations, as well as insurance regulators,
legislators, state officials and consumer representatives, is seeing
a brighter outlook for the insurance marketplace in Louisiana,
In the last decade, Louisiana legislators have
approved numerous reform measures aimed at strengthening our
homeowners and commercial
property markets. Louisiana was among those coastal states that
experienced a drastic reduction in the voluntary insurance market
following Hurricane Andrew in 1992. In trying to balance the needs
of Louisiana’s citizens with the concerns and reticence of
insurers, laws were enacted that revamped the system for financing
our state’s residual market plans for property insurance,
provided a “file and use” system for rate increases
or decreases averaging ten percent or less, and instituted commercial
deregulation as a modified “use and file” system.
In December 2005, Louisiana enacted its first statewide
building code, one of the country’s most stringent. HB
704 (Act 335), passed in the 2007 Regular Session, maintains
the Louisiana State
Uniform Construction Code, the statewide building code, and provides
resources for training and enforcement. The highlights of the code
• It applies to all new construction and major renovations greater
than 50 percent.
• Residential dwellings must meet the International Residential Code
2006 (IRC) and commercial buildings must meet the International
Building Code 2006 (IBC).
• The LA State Uniform Construction Code Council (LSUCCC) oversees
training and certification.
• Local governments enforce the building code using International
Code Council (ICC) certified inspectors.
The state, the Governor’s Office of Homeland Security and
Emergency Preparedness, and the Louisiana Recovery Authority have
allocated $35 million for the purposes of training, code office
initial expense and code enforcement.
The Legislature followed up this year with the January 1, 2008
abolition of the Louisiana Insurance Rating Commission, the panel
of political appointees who regulate insurance rates. The Rating
Commission is the most frequently cited impediment by insurers
to establishing competitive rates. It has also discouraged many
insurers from entering the Louisiana market. Scrapping the Rating
Commission will go down as one of the most positive insurance regulatory
reforms in Louisiana in recent history.
To further boost market development in Louisiana, the Legislature
enacted the Insure Louisiana Incentive Program. It provides $100
million in funding for capital matching grants to insurers writing
new property insurance in the state. The public invitation requesting
applications for participation in the program was issued October
2, 2007, and will remain open until November 1, 2007.
In the wake of hurricanes Katrina and Rita, our
policyholders were troubled by problems with adjusters, followed
rates and shrinking availability of coverage. “In this political
caldron, I think our Legislature showed restraint,” said
The Louisiana Property and Casualty Insurance Commission
was created 10 years ago by the Legislature, and its role was
expanded in 2001
from auto insurance to include homeowners and workers’ compensation.
The charge of the Commission is “to review and examine the
availability and affordability of property and casualty insurance
in the state” culminating in an annual report of its studies
and legislative recommendations to the governor, Legislature, and
commissioner of insurance.
The Commission members have brought diverse views
to bear on a number of topics and the effort has remained cooperative,
and effective for the Louisiana market. Many of the Commission’s
recommendations have paralleled laws ultimately enacted by our
Legislature. The result has been to create a statutory environment
in which responsible, solvent insurers should increasingly be able
to provide products equitably priced through market-based competition.
LPCIC Board Members:
Ted M. Haik, Jr., Chairman Richard Clements, Vice-Chairman
Haik, Minvielle and Grubbs Law Firm Clements Insurance Services,
James J. Donelon
Commissioner of Insurance
Jeff Albright Christine T. Berry, Ph.D. Lorrie K. Brouse
Chief Executive Officer Assistant Professor Regional Counsel
Independent Ins. Agents & Brokers of LA University of LA at
Monroe Allstate Insurance Company
Senator James David Cain H. Marcus “Marc” Carter Representative
Karen R. Carter
Chairman President Chairperson
Senate Committee on Insurance Imperial Fire & Casualty Insurance
Co. House Committee on Insurance
Col. James Champagne Joseph E. Deutsch, CPCU Representative Rick
Executive Director Executive Director Vice Chairman
LA Highway Safety Commission Property Insurance Association of
LA House Committee on Insurance
Nicholas Gachassin Steve Hymel F. Charles “Chuck” McMains
First Assistant Attorney General Commissioner, Office of Motor
Vehicles Attorney at Law
LA Department of Justice LA Dept. of Public Safety/Corrections
Jones Walker Law Firm
Tom O’Neal Senator Julie Quinn Kimberly
President Member Special Counsel
Hercules Transport, Inc. Senate Committee on Insurance Office of
Richard L. Stalder Earl B. Taylor Aubrey T. Temple, Jr.
Secretary District Attorney Chairman of the Board
LA Dept. of Public Safety/Corrections 27th Judicial District LA
Workers’ Compensation Corp.
Assistant Secretary, Office of Workers’
Compensation, LA Department of Labor