Inside Commissioner Donelon’s Anti-Policyholder Conference Before Session

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Louisiana Department of Insurance hosts seminars on how insurance industry can defeat policyholders in legislature and legal system

by Eric Holl, Executive Director, Real Reform Louisiana

March 9, 2022

We’re in a full-blown insurance crisis across South Louisiana as thousands of families and business owners get taken advantage of by their insurance companies. But to listen to Insurance Commissioner Jim Donelon and the insurance lobbyists he invited to speak at his annual LDI conference on Monday and Tuesday, the real crisis is that the legislature might actually do something to give hurricane victims a fighting chance when they file a claim.

The conference saw the launch of a full-scale effort by the commissioner and his industry allies to downplay the issues Louisianans are having with insurance. They indicated they will do everything possible to maintain the unacceptable status quo with platitudes and feel-good legislation that does little to change the insurance environment. If they’re successful it will ensure that more Louisianans will suffer the same abuse from insurance companies after the next storm.

You can view the conference agenda here. Here are some of the informational sessions that were offered that we attended:

“Observations in the Louisiana Property & Casualty Market” – in which insurance industry lobbyist Ronnie Johnson claimed hurricane victims buy boats with their insurance check instead of making repairs and praised Donelon (who was present at the meeting) for authoring legislation that is “favorable” to the industry as an alternative to pro-consumer legislation that has been filed in response to South Louisiana’s insurance crisis.

“The Agent Perspective” – In which prominent insurance lobbyist Jeff Albright and other lobbyists for insurance agents talked about how lobbyists “work very closely” with Donelon who “would be out in front” during session to ensure the industry’s interests are protected at the capitol. Donelon thanked Albright for “the work that we’ve been doing in preparing for what is truthfully going to be the most important session in my tenure.”

“Beating Bad Faith After Laura, Delta, and Ida” – In which insurance defense attorney Matthew Molson gave advice on how insurance companies can avoid paying penalties when they get caught improperly withholding payment from policyholders.

“Social Inflation and its Effect on the Insurance Market” – in which insurance industry advocate Lars Powell argued that big insurance companies shouldn’t have to pay for an accident victim’s medical care for severe injuries caused by a truck because “if you think about a person’s behavior before they had the loss, they weren’t acting like that was worth tens of millions of dollars or they would’ve stayed home.”

It’s shameful, but it’s no surprise coming from the insurance commissioner that has overseen Louisiana’s market as we have become the most expensive state for car insurance and allowed insurance companies to run roughshod over thousands of South Louisiana hurricane victims. The insurance commissioner shouldn’t be teaming up with the insurance industry to fight against policyholders, but if the LDI conference is any indication, that’s what we’ll see during this legislative session.

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Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs.

By Ben Riggs • 16 Feb, 2024

Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs. A new report shows that auto insurance rates are skyrocketing, rising by 26% across the U.S. On average, Louisiana drivers pay $2,909 annually, roughly 6.53% of their income for auto insurance. Wayne Watley at Watley Insurance Group lists “credit scores” among the reasons for Louisiana’s rising auto insurance costs, including poor roads and uninsured motorists. Mr. Watley goes on to say, “It’s a challenge because we’re not one of the richest states, but we have some of the highest premiums.” He is correct—and the data backs him up. Insurance companies use credit scores to determine insurance rates for policyholders. Louisiana ranks 48th in median household income and 49th in average credit score . According to a recent study , safe drivers in Louisiana with poor credit pay 111% more than safe drivers with excellent credit ($1,505 / $713). Consequently, Louisiana has the second-highest auto insurance rates in the nation, which leads to more uninsured motorists, another primary cause of higher insurance rates. The use of credit scores in rate setting also creates perverse incentive structures that make Louisiana roads less safe. In Louisiana, safe drivers with poor credit pay an average of $905 more than drivers with a DWI and excellent credit ($3,548 / $2,643). Meanwhile, traffic fatalities increased by 21% from 2019 to 2022 in Louisiana, and the fatality rate per 100 million vehicle miles traveled increased by 18%, according to KPLC . Louisiana desperately needs real insurance reforms that lower costs, protect consumers, hold insurers accountable, and make our roads safer.