Louisiana Record

Friday, May 29, 2020

Group rates Louisiana last in insurance regulation; lawmaker says reform will be hot topic in 2020

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By Zeta Cross | Jan 2, 2020

Jim Donelon, insurance commissioner | jimdonelon.com

Louisiana finished last for the second year in a row in the R Street Institute’s Insurance Regulation Report Card. 

The Washington D.C. think tank bills itself as a conservative and libertarian policy research institute that watches the national insurance industry.

“The Pelican State has the worst insurance regulatory environment in the country,” R Street’s report said.

Louisiana is one of 12 states in the nation with an elected insurance commissioner, a strike against it, as far as R Street is concerned. 

“There is just no winning in their formula for us,” John Tobler, deputy commissioner of public affairs with the Louisiana Department of Insurance, told the Record. “Out of the gate in R Street’s rating formula, we start out with a 'C' because we have an elected insurance commissioner and our structure requires prior review and approval of rates.” 

Again this year, the R Street Report faulted Louisiana for its insurance oversight system.

“Louisiana employs a stringent system of rate regulation, which no doubt contributes to the lack of competition in its auto insurance market,” the report said.

Tobler said regulatory reform was a high-level topic in election campaigns across the state in the fall. 

“In the last election, almost every member of the legislature ran on promoting insurance reform. It is sure to be one of the hottest topics, if not the hottest, in the upcoming session next summer,” Tobler said. 

Tobler pointed to a number of successes that the department of insurance has had as it worked to promote competition in the Louisiana auto insurance industry in 2019.

The largest insurer, State Farm, has lowered its rates five times within the last year, Tobler said. 

“They lost over 100,000 policies to competition, and they are working to get those customers back,” he said.

GoAuto, Louisiana Farm Bureau and Progressive have also reduced auto insurance rates in the past year, he said.

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