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La. Senate passes 2 proposed compromise bills to lower auto insurance rates

The Senate passed a proposed compromise bill by Rep. Richard Nelson, R-Mandeville to lower auto...
The Senate passed a proposed compromise bill by Rep. Richard Nelson, R-Mandeville to lower auto insurance rates.(LSU Manship School News Service)
Published: Jun. 29, 2020 at 5:27 PM CDT|Updated: Jun. 29, 2020 at 7:31 PM CDT
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BATON ROUGE, La. (LSU Manship School News Service) - With the special session nearing an end, the Senate passed two possible compromise bills Monday aimed at lowering auto insurance rates and winning support from Gov. John Bel Edwards, who vetoed a major Republican-backed tort reform plan. The Senate voted 30-8 to approve a bill by House Speaker Clay Schexnayder, R-Gonzalez. Another bill, by Rep. Richard Nelson, R-Mandeville, passed 35-3, with seven Democrats voting in support. The House passed Nelson’s bill 82-9 last week, with 21 Democrats voting for it.

House Speaker Clay Schexnayder
House Speaker Clay Schexnayder(Madeline Meyer / LSU Manship School News Service)

Stephen Waguespack, head of the Louisiana Association of Business & Industry, told The Advocate/The Times-Picayune that his group was fine with either Nelson’s or Schexnayder’s bill.

The vetoed bill was proposed by Sen. Kirk Talbot, R-River Ridge. It would have limited damages awarded to plaintiffs in personal injury cases in an attempt to lower auto insurance premiums.

Louisiana has the second-highest car insurance rates in the country, after Michigan.

Republicans have not been able to muster the votes to override Edwards’ veto, and have focused on passing replacement bills or resolutions while negotiating with Democrats, who want greater assurances that rates would go down and that accident victims would not be unfairly treated.

Rep. Alan Seabaugh, R-Shreveport, and Sen. Robert Mills, R-Minden, have filed three identical resolutions that follow Talbot’s methods to lower insurance rates and could be implemented without Edwards’ consent.

The session must adjourn by 6 p.m. Tuesday, and House and Senate leaders must decide whether to send one of the bills to Edwards or proceed with the resolutions.

Like Talbot’s bill, Nelson’s would extend the time that parties have to file suits in hopes of encouraging parties to settle out of court. It would also limit the amount of recoverable medical expenses and insurance premium payments, and it would lower the monetary amount an injury has to be worth to be decided by a jury rather than a judge. But unlike Talbot’s bill, it would reduce the default number of jurors to six from 12 to try to lessen the burden on courts and jurors. Judges expressed concerns that Talbot’s bill would overwhelm courts with jury trials and that rural areas could have trouble finding enough jurors for personal injury cases.

In another compromise, Nelson’s bill includes a sunset provision that would repeal the law if rates did not decrease by at least 15% in three years.

Democrats opposed Talbot’s bill because it did not mandate rate reductions, and Republicans refused to include language that would repeal the legislation if the changes did not result in lower premiums.

Unlike any other so-called tort-reform bill this session, Nelson’s included comparative fault language that would prevent injured plaintiffs from recovering damages if their percentage of fault is greater than the combined percentage of fault of all other persons found to have contributed to the injury, death, or loss. Twenty-three states have comparative fault, Nelson said, and the 14 states with the lowest car insurance rates have the same provision included in his bill.

Nelson’s bill would prohibit insurance companies from setting rates based on a driver’s gender if they are over the age of 25.

Schexnayder’s bill also would allow seatbelt evidence to be used in court, lower the monetary amount an injury has to be worth to be decided by a jury rather than a judge and would prohibit mentioning the insurance company during a trial besides during the opening and closing.

Democrats sponsored bills that would have tried to lower insurance rates by prohibiting insurance companies from determining rates based on age, gender, marital status, and credit score, but faced opposition from Republicans. Edwards has said he supports this measure and that he believes “discriminatory practices” need to end in order to lower rates.

Sen. Jay Luneau, D-Alexandria, authored several bills that would have prohibited these “discriminatory practices,” but his bills were killed in committee. Despite Nelson’s compromise, Luneau was one of the three votes in opposition to Nelson’s bill. “This bill puts something bad for everybody, and it makes for a bad bill all around,” he said of the compromise.

Other Democrats spoke in support of Nelson’s bill, saying the debate over insurance rates has lasted for too long with no real action. “I’m a trial lawyer, but at the end of the day I want to end this debate about what we need to do to lower insurance rates,” said Sen. Cleo Fields, D-Baton Rouge. Sen. Karen Peterson, D-New Orleans, agreed and said, “Let’s pass this bill, the governor signs it, and for the next four months let’s talk about something that’s actually going to move the needle.”

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