Louisiana insurance commissioner calls for reform as State Farm drops California policies
Editor’s note: This story has been updated to reflect the revised statement from the Louisiana insurance commissioner.
BATON ROUGE, La. (BRPROUD) — Louisiana Insurance Commissioner Tim Temple issued a statement on Tuesday, March 26, about State Farm pulling out of the California insurance market. He later revised the statement to clarify the company isn’t renewing about 2% of policies in that state.
He’s asking Louisiana residents to support proposed legislation to help fix Louisiana’s current insurance crisis.
“If we don’t enact bold change this session, I believe our ongoing insurance crisis will not just stay the same — it will get worse,” he said.
Months ago, State Farm said it wouldn’t issue new policies in California, and last week, it announced that 72,000 existing policies on houses and apartments will be discontinued later this year.
Temple said the reason cited for the move include: “catastrophe exposure, inflation, reinsurance costs and outdated regulation.”
Following strong hurricanes in 2020-21, several insurers left the state or went out of business. Homeowners say policy prices are catastrophic, keeping some from being able to buy or keep property.
“Insurers and reinsurers have repeatedly told me they have three major concerns in Louisiana: catastrophe exposure, overregulation and a poor legal environment,” he said in a statement.
Temple has supported legislation to address the state’s pending insurance crisis, but some are calling the proposals too industry-friendly.
Primary goals are to cut down on the number of lawsuits that can be filed against insurance companies and create a payment timeline.
He said keeping insurance available is key to making it more affordable. He also wants to remove some coverage restrictions.
This Week in Louisiana Politics: See the latest news from the Louisiana Legislature
Read Temple’s full statement below:
“As natural disasters become more frequent and more severe, the insurance industry is taking a harder look at each state to determine whether doing business there is worth the risk.
“Last week, State Farm General Insurance Company announced the non-renewal of thousands of insurance policies in California citing several factors including catastrophe exposure, inflation, reinsurance costs and outdated regulation. This represents about 2% of State Farm General’s policies in California.
“California’s insurance department recently acknowledged that overregulation is driving insurers away, and the agency is making an effort to modernize oversight of its marketplace.
“Insurers and reinsurers have repeatedly told me they have three major concerns in Louisiana: catastrophe exposure, overregulation and a poor legal environment. I’m doing everything I can to address their first concern through my support for the Louisiana Fortify Homes Program and other resiliency efforts, and the industry is taking notice.
“But increasing resiliency is a long-term project that won’t attract companies to Louisiana on its own. We must also modernize our regulatory framework and fix our broken legal environment, and we must do both now. If we don’t enact bold change this session, I believe our ongoing insurance crisis will not just stay the same — it will get worse.
“To the residents of our great state, I hope you will join me in asking the leaders at the State Capitol to pass the meaningful insurance reform they are considering this session. This is the only path to creating a competitive and stable insurance market that will help bring premium relief to Louisiana consumers.“
Louisiana Insurance Commissioner Tim Temple
Latest News
King Charles III in Easter message calls for kindness after cancer diagnosis
Biden narrowly leads Trump, but trails when third party candidates factored in, poll finds
Still climbing: Powerball jackpot increases to $935 million after no one wins the top prize
For the latest news, weather, sports, and streaming video, head to BRProud.com.
