Louisiana Voice

First, it was the issue of homeowner insurance deductibles. Time was, a homeowner could opt for deductibles of $500, $1,000, or just about any other amount s/he chose and that deductible would apply across the board for damages.

But then the insurance companies, already flush with cash, decided it would be better for their shareholders if the deductible for “named storms” would be a tad higher—like 10 percent of the home’s appraised value. Hence, a home appraised at $150,000 (about the median appraisal) would be smacked with a $15,000 deductible for damage from a “named storm.”

And, bear in mind, that is wind damage only. Flood damage is an entirely different issue and those premiums are projected to soar out of sight and out of affordability for many homeowners.

And where was our Department of Insurance when Allstate, State Farm, Progressive, et al, came up with this beautiful scheme?

Strangely silent.

And where was our Department of Insurance when Allstate and State Farm battled with stressed-out homeowners over whether damage was from rising or falling water, forcing many homeowners to either settle in for years-long battles or to settle for pennies on the dollar?

Strangely silent.

And in 2018, when the Louisiana Legislature approved a resolution directing the Department of Insurance to “establish a task force to conduct a comprehensive study of the commercial bail bond industry as a whole and make recommendations for proposed legislation and policy changes to more effectively serve the residents of Louisiana,” what was the result?

A public records request to the Department of Insurance earlier this month produced this response from John Tobler, deputy commissioner of Public Affairs:

“Two meetings were held by our staff, taskforce members, members of the public and other bail bond industry stakeholders on September 27, 2018 and November 15, 2018. Additionally, no recommendations were made by the group for forwarding to the Legislature.”

So, in response to a unanimous resolution from both the House and Senate, the Department of Insurance was, for all practical purposes, strangely silent.

So now, Baton Rouge Advocate Capitol Bureau Chief Mark Ballard informs us that Louisiana Insurance Commissioner Jim Donelon is “okay” with the fact that insurers may pop widows with higher rates for automobile insurance for no other reason than the fact they are now single.

“The truth is that single women pay higher premiums than married women because of actuarial data that’s used in every of the 50 states,” Ballard quotes Donelon as saying. “It doesn’t matter if you’re a teenager, a single woman or if you’re a widow or if you’re a divorcee.”

Then he added, “I don’t know if that is true on the male side.”

Where is an insurance commissioner who will fight for his constituency?

To read the full text of Ballard’s story, click HERE.

I have tried—without success—to understand how Mrs. Smith is somehow a greater risk on our streets and highways now that her husband is no longer with us. She is the same person she was a week before his death. Mrs. Jones, who just got a divorce, might be an angry driver, depending on the reasons for the marriage failure, but I just don’t buy the theory that she’s a greater menace as a driver now than she was last year. Lest I be accused of gender bias, My position for widowers and divorced males is the same.

At least three bills have been pre-filed for the upcoming legislative session that would address the problem of rate discrimination against widows and divorcees. It remains to be seen if any of those bills will make their way to the governor’s desk.

Donelon’s acquiescence to the dictates of the insurance industry is not difficult to understand. While he’s elected by voters to represent the interests of the citizens of Louisiana, his political campaigns have been financed in large part by contributions from INSURANCE INDUSTRY INTERESTS.

And therein lies the problem.

I’ve said it before and I would reiterate that no public regulator should be allowed to accept contributions from the industry he or she regulates.

The attorney general accepts the bulk of his contributions from attorneys. That applies not only to Jeff Landry, the current AG, but to a long string of predecessors, as well.

Then there are judges—from local municipal judges all the way up to the Louisiana Supreme Court—who receive the majority of their campaign contributions from—you guessed it—lawyers, lawyers of all stripes: corporate, tax, trial, defense and family counselors. The only exceptions are federal judges, who are appointed.

What’s the solution? Normally, one might suggest making judges, the attorney general and insurance commissioner appointive positions. But one must remember, we’re in Louisiana and that seems to necessarily mean that appointees will be campaign contributors as well. Their donations will instead be directed further up the food chain, i.e. the governor.

And governors traditionally pay scant attention to qualifications when doling out appointments to boards and commissions and even some agency and departmental heads.

So, why would attorneys general, judges, and insurance commissioners be any different?

Meanwhile, the citizens of Louisiana continue to be under-represented by the Louisiana Department of Insurance.