There’s a great new edict that’s about to become law in my home state of Louisiana. It’s called the GTCPTG statute. Short for, “Give the Criminals plenty of time to get away.” Louisiana legislators and the state’s insurance department are working overtime to assure that the Bayou State continues to hold the title of the country’s most expensive state in which to buy insurance.
Two noble goals have been set in the state’s capitol in Baton Rouge. First, pass new laws to be absolutely sure that automobile insurance rates keep going up. And second, pass other laws that stop property owners from asserting legal claims against the state run property insurance company. There is certainly a great deal at stake, and it looks like state legislators and insurance officials will stop at nothing in order to maintain the state’s number one position of having the highest auto and property rates in America. Way to go, guys.
There’s a saying has been around the Baton Rouge state capitol for years -- “Hold on to your wallets…the legislature’s in session, and they’re about to stick it to you.” There has never been a more appropriate time for such an admonition. In the 40 years plus that I have spent around the legislative and regulatory process in Louisiana, as a legislator, a statewide official, an insurance regulator, and as a political observer, I cannot recall a time when policy holders have been so maligned, and the interests of the public at large have been so disregarded.
First up is the “give the law breakers notice” legislation that is simply incredible. The proposed law, which has already passed the House of Representatives, requires police agencies to alert the public and give advance notice before they can set up check points to stop and apprehend drunk drivers, uninsured drivers, and cars with expired inspection stickers. Can you imagine how fast the word would spread by social media, like Twitter, when other drivers see a check point being set up?
Drunk drivers are the cause of more than half the serious injuries and deaths on Louisiana roadways. Drinking and driving uninsured are major reasons for Louisiana having the highest insurance rates in the country. Where is the logic of alerting law breakers that a traffic stop is close at hand? One can just picture the drunk driver both laughing and weaving down the road as he takes a side street to avoid the check point.
And why give notice to drunks who can kill you and uninsured drivers who can send your insurance rates through the roof? How about the drug dealers in high crime neighborhoods? Do we give them notice that a bust is close at hand? How about the state giving advance warning before any criminal arrest is about to be made. Breaking the law is, well, breaking the law. Why give those who willfully violate the law plenty of advanced warning?
The merciless suffering being piled on Louisiana policy holders does not stop at the, “Give the Criminals Notice” legislation. Some 18, 000 Louisiana property owners, who put their trust in both the legislature and insurance officials are being denied legitimate claims by the very officials who were elected to protect them. It’s the long running and very sad saga of the Louisiana Citizens Property Insurance Company.
Citizens was supposed to be the insurer of last resort, the lifeline for homeowners living in high risk areas. Instead, it has become the most dysfunctional agency in state government. It was a disaster waiting to happen from its very inception. Created by the Louisiana Legislature at the behest of the Insurance Department, Citizens was one of the most poorly constructed business operations ever conceived by a state legislature. With no capital and no surplus available to get the company started on a sound financial footing, Citizens was broke from day one. Almost immediately it became obvious that no one at Citizens had the slightest idea of how to run an insurance company.
Just last week, the Louisiana Supreme Court ruled that Citizens will be stuck with a judgment approaching $125 million. Because state run Citizens is broke and well over one billion dollars in debt, every other property owner in the state is required, by Louisiana law to bail out the incompetent actions of this company, a company that never should have been formed in the first place. To add insult to injury, and rub more salt in the wounds of unpaid property owners, Citizens continues to drag out any settlement by filing a quixotic appeal to the U.S. Supreme Court that has absolutely no chance of even being granted a hearing. In the meantime, in pursuit of this totally futile appeal, there are lawyers to hire at a cost huge additional cost, that policy holders across the state will end up paying.
Instead of calling for a full investigation and coming to the aid of the abused policyholders, some legislators, at the bidding of Citizens, are offering legislation to prohibit any judgment against this contemptible company, and showing even more contempt for the public by making such a law retroactive. That’s right. Draft this proposed law so as to stop cold any effort by those who have been ripped off by Citizens from receiving one penny. If the legislature will not come to the defense of these abused policyholders, hopefully there will be a courageous prosecutor out there who will say, “enough is enough,” and begin a criminal investigation.
One of the major problems facing Louisiana insurance policy holders is that, unlike most states, there is no independent consumer protection office to challenge regulators or legislators. In many states, such a policy protector is allowed to go into court and challenge the actions of companies like Citizens, as well as challenge regulators and legislators that act irresponsibly. But in Louisiana, as in the case of Citizens, the policyholder is not only on his own, but is forced to fight insurance regulators in court.
The high cost of insurance in Louisiana is a major reason why competing states are drawing ahead in so many economic sectors. Louisiana just cannot compete because of the high cost of insurance. Louisiana homeowners and businesses are paying some $3 billion more in insurance premiums than the national per capita average -- more than twice the amount paid by citizens in any other southern state. THREE BILLION DOLLARS MORE! Think what an additional $3 billion saved and poured back into the Louisiana economy would mean to the economic vitality and quality of life in the state.
Hopefully, there will be some legislators with the backbone to stand up to these bureaucrats who would seem to have little concern for, and even contempt for the public interest. If not, the Bayou State will continue to languish at the bottom, and its citizens can wear the pin that says: “Louisiana: We know how to Stick it to us!
“It’s not hurricanes that are causing high insurance rates, but bad government policy,”
Policy analyst Michelle Minton
Peace and Justice