Louisiana News

Louisiana insurance commissioner proposes fines for code violations during recent hurricanes

(The Center Square) — Louisiana Insurance Commissioner Jim Donelon is pursuing more than three-quarters of a million dollars in fines against five insurance companies over alleged violations of the state’s insurance code during recent hurricanes.

The Louisiana Department of Insurance (LDI) on Thursday proposed a combined $764,750 in fines against five home insurance companies after market conduct examinations found 44 instances of improper activities and business practices involving claims and complaint handling, operations and management during hurricanes Laura, Delta and Zeta.

The market examinations focused on insurance activities between August 27, 2020 and June 30, 2021, and the examination reports produced were adopted on April 11.

“The devastation and impact of the 2020 hurricane season was overwhelming, but that doesn’t excuse the activities we discovered in our market conduct examinations of these five insurers,” Donelon said. “I strongly encourage our state’s insurance industry to take note of the unacceptable behavior we found and know we will continue to pursue appropriate fines and regulatory action against any insurer that is not meeting their obligations.”

Examiners found 10 instances of improper activities or business practices involving United Property & Casualty Insurance Company, including failure to conduct an on-site review of the underwriting and claims processing operations; forcing policyholders to pursue litigation to recover amounts due under their insurance policy; failing to make payment within the required time frame; and other violations.

LDI proposed a fine of $250,000 for United Property and Casualty.

The department proposed a fine of $183,000 for GeoVera Specialty Insurance Company for nine violations that included failing to make payment within the required time frame; utilizing multiple desk adjusters to delay claim investigation and settlement along with other infractions.

FedNat Insurance Company faces $173,500 in fines for 10 violations that involved failing to make payment within the required time frame; and utilizing multiple desk adjusters to delay claim investigation and settlement among others.

LDI’s examination of Maison Insurance Company found five instances of improper activities or business practices involving the same activity: failing to make payment within the required time frame; and utilizing multiple desk adjusters to delay claim investigation and settlement.

The department proposed a fine of $43,250 for Allied Trust Insurance Company for failing to respond to claim inquiries and requests within 14 days; failing to make payment within the required time frame and other violations.

The companies have until May 11 to appeal LDI’s findings.

The fines come a few weeks after Gov. John Bel Edwards held events in New Orleans, Larose and Lake Charles to learn from the challenges Louisiana residents continue to face with insurance companies in the aftermath of the 2020 and 2021 hurricanes.

Edwards touted a slate of Democrat-backed insurance reform bills — House Bill 317, Senate Bill 150, HB 316, HB 692, HB 682, and HB 805 — but also stressed his support for reforms is not restricted to specific bills in his legislative agenda.

“Fortunately for home and business owners who are still trapped in insurance purgatory, unable to rebuild and fully recover, there is bipartisan support and momentum for meaningful insurance reform in this legislative session,” Edwards said. “I look forward to working with legislators in this fight to get our home and business owners out of this desperate situation.”

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