The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Cheryl Horne.
DIGEST
SB 195 Original 2015 Regular Session Brown
Proposed law sets forth a nonadversarial alternative dispute resolution procedure, otherwise called
mediation, with respect to property claims under personal lines residential and commercial lines
residential policies before the appraisal process or before commencing litigation.
Proposed law permits mediation to be requested only by the policyholder as a first-party claimant,
or the insurer. Provides that if the policyholder requests mediation, participation by legal counsel
is permitted.
Proposed law does not apply to commercial coverages, to private passenger motor vehicle insurance
coverages, or to disputes relating to liability coverages in policies of property insurance.
Proposed law requires the insurer to notify the policyholder of his right to mediation within 14 days
of the policyholder filing a first-party claim.
Proposed law requires the insurer to bear all the costs of mediation conferences except when the
insured fails to appear at the conference. If the insurer fails to appear at the conference, the insurer
shall pay the insured's actual cash expenses incurred in attending the conference if the insurer's
failure to attend was not due to a good cause acceptable to the department. Provides that an insurer
will be deemed to have failed to appear if the insurer's representative lacks authority to settle the full
value of the claim.
Proposed law requires the department to adopt by rule a property insurance mediation program to
be administered by the department or its designee. The rules shall provide:
(1)Reasonable requirements for processing and scheduling of requests for mediation.
(2)Qualifications for mediators seeking to participate in the mediation program.
(3)The selection of mediators.
(4)Provisions governing who may attend mediation conferences.
(5)Criteria for the conduct of mediation conferences.
(6)The right to legal counsel.
Proposed law requires all statements and documents produced at mediation to be deemed privileged
and confidential pursuant to present law. Requires all parties to the mediation to negotiate in good faith and have full authority to settle the claim immediately.
Proposed law provides that mediation is nonbinding; however, if a written settlement is reached, the
insured has three business days within which the insured may rescind the settlement unless the
insured has cashed or deposited any check or draft disbursed by the insurer. If a settlement
agreement is reached and is not rescinded, it shall be binding and considered a release of specific
claims.
Proposed law provides that if the insurer fails to notify the insured of their right to participate in
mediation or if the insurer requests the mediation and the mediation results are rejected by either
party, the insured is not required to submit to or participate in any loss appraisal process as a
precondition to legal action for breach of contract.
Proposed law defines "claim" as any dispute between an insurer and an insured relating to a material
issue of fact other than a dispute:
(1)With respect to which the insurer suspects fraud.
(2)Where, based on agreed upon facts as to the cause of loss, there is no coverage under the
policy.
(3)With respect to which the insurer has a reasonable basis to believe that the policyholder has
intentionally made a material misrepresentation of fact which is relevant to the claim.
(4)With respect to which the amount in controversy is less than $1,000 unless the parties
otherwise agree to mediate the dispute.
Effective August 1, 2015.
(Adds R.S. 22:1272.)