Temple encourages insurance reform following State Farm California reduction

    Louisiana Department of Insurance Tim Temple released a statement on Tuesday encouraging state lawmakers to approve the insurance reform bills being considered this session. 

    In his statement, he refers to popular insurer State Farm reducing its coverage in the California market last week. The company cited several factors in its decision, including catastrophe exposure, inflation, reinsurance costs and outdated regulation. 

    With the frequency and strength of natural disasters increasing, Temple says, the insurance industry is taking a harder look at each state to determine whether doing business there is worth the risk. 

    “Insurers and reinsurers have repeatedly told me they have three major concerns in Louisiana: catastrophe exposure, overregulation and a poor legal environment,” Temple says. “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.”

    Temple says 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,” he says. “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.”

    Last week, the Senate Committee on Insurance approved four bills that are part of Louisiana Temple’s agenda. One of the bills—Senate Bill 370, sponsored by Sen. Adam Bass (Bossier City)—would make it easier for insurance companies to refuse to renew policies protected under the state’s three-year rule. In Louisiana, the three-year rule makes it difficult for an insurance company to drop a client if the insurer has written the client’s insurance policy for three years. 

    “This is the only path to creating a competitive and stable insurance market that will help bring premium relief to Louisiana consumers,” Temple concluded his statement Tuesday. 

    Editor’s note: This story has been updating since original publication to reflect that State Farm reduced its coverage in the California market.