SLS 13RS-159 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2013
SENATE BILL NO. 19
BY SENATOR ALLAIN
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
PROPERTY INSURANCE. Prohibits Citizens Insurance Corporation from assessing rates
in excess of 25% per year without approval from the Senate and House committees on
insurance. (8/1/13)
AN ACT1
To amend and reenact R.S. 22:2303(A), relative to Louisiana Citizens Insurance2
Corporation; to provide with respect to rates, rating plans, and rate rules applicable;3
to provide for limitations on rate increases; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 22:2303(A) is hereby amended and reenacted to read as follows: 6
ยง2303. Rates, rating plans, and rate rules applicable7
A.(1) As residual markets, the plans made available by the Louisiana Citizens8
Property Insurance Corporation are not intended to offer rates competitive with the9
voluntary market. Rates for policies issued under the Coastal Plan and the FAIR Plan10
shall be set by the governing board of the Louisiana Citizens Property Insurance11
Corporation, adjusted annually, and, subject to the limitation in Paragraph (2) of12
this Subsection, shall exceed by at least ten percent the higher of (a) the actuarially13
justified rate or (b) the highest rates charged among assessable insurers that have a14
minimum of two percent of the total direct written premium in each respective parish15
for that line of business offered as stand-alone coverage in the preceding year, or,16
with respect to personal lines property insurance, excluding wind and hail policies,17 SB NO. 19
SLS 13RS-159 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
only, (c) the highest rates charged among assessable insurers in each respective1
parish which in the preceding year increased by at least twenty-five additional2
personal lines property insurance policies, excluding wind and hail policies, in such3
parish, the total number of such policies in effect for the parish over the year before.4
Such rates shall include an appropriate catastrophe loading factor and may include5
rules for classification of risks insured hereunder and rate modifications hereof.6
(2) Louisiana Citizens Insurance Corporation shall be prohibited from7
assessing or implementing an annual rate increase for any parish in excess of8
twenty-five percent without approval from the House and Senate committees9
on insurance, acting jointly. The chief executive officer and the staff actuary for10
the corporation shall provide testimony to the joint committee which specifies,11
by parish, the basis and methodology used in determining the proposed rate12
increase.13
(2)(3) The method used to determine the highest rates charged among14
assessable insurers that have a minimum of two percent of the total direct written15
premium in each parish and with respect to personal lines property insurance,16
excluding wind and hail policies, only, the highest rates charged among assessable17
insurers in each respective parish which in the preceding year increased by at least18
twenty-five additional personal lines property insurance policies, excluding wind and19
hail policies, in such parish, the total number of such policies in effect for the parish20
over the year before shall be set forth in the annual rate review provided by the21
governing board and shall be documented in the rate filing as required in Subsection22
C of this Section. The chief executive officer of the corporation or his designee shall23
survey all insurers to make the determinations necessary to comply with this Section.24
All insurers shall submit to the chief executive officer of the corporation or his25
designee all information necessary for the corporation to comply with the provisions26
of this Section. All information received by the chief executive officer or his27
designee in response to the survey shall be considered proprietary, privileged, and28
confidential by the chief executive officer, all members of his staff, and all members29 SB NO. 19
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
of the board of the corporation. Such information shall be exempt from the public1
records law (R.S. 44:1 et seq.). However, all such information shall be subject to the2
legislative auditor's authority pursuant to R.S. 24:513 et seq. The chief executive3
officer of the corporation or his designee shall execute appropriate confidentiality4
agreements to protect the information provided by assessable insurers, making5
allowance for the information to be provided to the commissioner of insurance as6
part of the corporation's rate filing and to the legislative auditor as provided in this7
Paragraph.8
(3)(4) Prior to determining any such rates, the governing board shall adopt9
such formulas as may be necessary for determining rates. The board may establish10
rating territories as it deems appropriate. Any changes to the rating territories shall11
be approved by the House and Senate committees on insurance, acting jointly.12
* * *13
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Present law prohibits the plans made available by the Louisiana Citizens Property Insurance
Corporation ("Citizens") from competing with the voluntary market. Further provides that
rates set by the governing board of Citizens shall exceed by at least 10% the higher of the
actuarially justified rate or the highest rates charged among assessable insurers that have a
minimum of 2% of the total direct written premium in each respective parish for that line of
business in the preceding year. With respect to personal lines property insurance, excluding
wind and hail policies, only, present law provides the rates shall be the highest rates charged
among assessable insurers in each respective parish which in the preceding year increased
by at least 25 additional personal lines property insurance policies, excluding wind and hail
policies, in such parish, the total number of such policies in effect for the parish over the
year before.
Proposed law retains present law and adds that the rates set by the governing board of
Citizens shall exceed the highest rates charged among assessable insurers that have a
minimum of 2% of the total direct written premium in each respective parish for that line of
business offered as stand-alone coverage in the preceding year.
Proposed law prohibits Citizens from assessing rate increases in excess of 25% in a single
year without approval of the House and Senate committees on insurance, acting jointly.
Further provides that the chief executive officer and the staff actuary for the corporation
shall provide testimony to the joint committee which specifies, by parish, the basis and
methodology used in determining the proposed rate increase.
Effective August 1, 2013.
(Amends R.S. 22:2303(A))