HLS 16RS-1220 ORIGINAL
2016 Regular Session
HOUSE BILL NO. 839
BY REPRESENTATIVE SEABAUGH
INSURANCE/PROPERTY: Provides for a property insurance program mediation program
1 AN ACT
2To enact R.S. 22:1272, relative to an alternative procedure for resolution of disputed
3 property insurance claims; to provide procedures and requirements for the mediation
4 program; to provide for appointment for mediators; to provide for payment of the
5 costs of mediation; to provide for promulgation of regulations; and to provide for
6 related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 22:1272 is hereby enacted to read as follows:
9 ยง1272. Property insurance mediation program
10 A. The legislature of Louisiana hereby finds and declares that there is a need
11 for a mediation program as an optional, nonadversarial, voluntary alternative dispute
12 resolution procedure that will promote fair, efficient, and prompt handling of certain
13 property insurance claims and reduce the need for litigation.
14 B. Mediation pursuant to this Section is an option available to the parties to
15 a dispute with respect to property claims under personal lines residential and
16 commercial lines residential policies prior to the commencement of the appraisal
17 process or litigation. It is also available to litigants referred to the commissioner by
18 a court having jurisdiction over such claims.
19 C. Mediation pursuant to this Section is only available for policies or
20 coverages specified below:
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1 (1) Personal lines residential coverage consisting of the type of coverage
2 provided by homeowners', mobile home owner, dwelling, tenant, condominium unit
3 owner, cooperative unit owner and similar policies.
4 (2) Commercial lines residential coverage consisting of the type of coverage
5 provided by condominium association, cooperative association, apartment building
6 and similar policies.
7 D. Mediation pursuant to this Section may be requested only by the
8 policyholder as a first-party claimant, or the insurer, or their respective legal
9 representatives.
10 E. The insurer shall notify the policyholder of the right to request mediation
11 pursuant to this Section. The commissioner shall prepare a consumer information
12 pamphlet for distribution to policyholders regarding the mediation program.
13 F. The insurer shall bear the costs of the mediation pursuant to this Section.
14 The costs shall be reasonable as determined by the commissioner.
15 G. The commissioner shall promulgate rules or regulations, including
16 emergency rules or regulations, for a property insurance mediation program to be
17 administered by the commissioner pursuant to this Section. The rules or regulations
18 shall provide for:
19 (1) The costs of the mediation.
20 (2) The processing of requests for and the scheduling of the mediation.
21 (3) The qualifications for the mediators.
22 (4) The selection of the mediators.
23 (5) The attendance of the parties to the mediation.
24 (6) The criteria for the conduct of the mediation.
25 (7) The attendance of legal counsel.
26 (8) The allocation of the costs of the mediation including any actual costs
27 incurred by the parties in the event a party fails or refuses to appear at the mediation.
28 (9) The requirement that each party attending the mediation have the legal
29 authority to settle the full value of the claim.
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HB NO. 839
1 (10) The requirement that the fees assessed by the administrator include a
2 charge necessary to defray the expenses of the commissioner related to his duties
3 pursuant to this Section.
4 (11) Any other matters that the commissioner deems applicable, relevant,
5 and appropriate for the implementation and administration of a property insurance
6 mediation program.
7 H. All statements made and documents produced at the mediation shall be
8 deemed privileged and confidential pursuant to R.S. 9:4112.
9 I. If the mediation results in a settlement of all or any portion of a disputed
10 property claim, the settlement so reached shall be reduced to writing by the mediator,
11 signed by all parties, and shall become enforceable as a transaction or compromise
12 between the parties. The insurer shall be obligated to pay the sum agreed upon within
13 thirty days of the date the parties execute the written settlement agreement. Any
14 settlement agreement reached between the parties shall be binding and act as a
15 release of the disputed property claims that were presented and settled at the
16 mediation. The failure or refusal of the insurer to pay the full amount agreed upon
17 in settlement shall entitle the policyholder to a cause of action against the insurer
18 pursuant to the provisions of R.S. 22:1973.
19 J. If the insurer fails to comply with Subsection E of this Section by failing
20 to notify a policyholder of his right to request mediation, or if the insurer requests
21 the mediation and the mediation results are rejected by either party, the policyholder
22 is not required to submit to or participate in any contractual loss appraisal process
23 regarding the property loss damage as a precondition to legal action for breach of
24 contract against the insurer for its failure to pay the policyholder's claims covered by
25 the policy.
26 K. The commissioner may designate an administrator to carry out any of the
27 provisions of this Section and may take this action by means of a written contract or
28 agreement.
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1 L. For purposes of this Section, the term "claim" refers to any dispute
2 between an insurer and a policyholder relating to a material issue of fact. However,
3 "claim" shall not include any dispute:
4 (1) With respect to which the insurer has a reasonable basis to suspect fraud.
5 (2) Where, based on agreed-upon facts as to the cause of loss, there is no
6 coverage under the policy.
7 (3) With respect to which the insurer has a reasonable basis to believe that
8 the policyholder has intentionally made a material misrepresentation of fact that is
9 relevant to the claim, and the entire request for payment of a loss has been denied on
10 the basis of the material misrepresentation.
11 (4) With respect to which the amount in controversy is less than one
12 thousand dollars, unless the parties mutually agree to mediate a dispute involving a
13 lesser amount.
14 Section 2. This Act shall become effective January 1, 2017.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 839 Original 2016 Regular Session Seabaugh
Abstract: Creates the property insurance mediation program.
Proposed law provides for mediation as an option available to the parties to a dispute with
respect to property claims under personal lines residential and commercial lines residential
policies prior to the commencement of the appraisal process or litigation. Provides that
mediation is also available to litigants referred to the commissioner by a court having
jurisdiction over such claims. Further provides that mediation pursuant to proposed law is
not available for policies or coverages not specified in the proposed law.
Defines for purposes of proposed law that personal lines residential coverage consists of the
type of coverage provided by homeowners', mobile home owner, dwelling, tenant,
condominium unit owner, cooperative unit owner and similar policies, and commercial lines
residential coverage consists of the type of coverage provided by condominium association,
cooperative association, apartment building, and similar policies.
Mediation pursuant to the proposed law may only be requested by the policyholder as a
first-party claimant, or the insurer, or their respective legal representatives.
Proposed law provides that the insurer shall notify the policyholder of the right to request
mediation pursuant to proposed law. Requires the commissioner to prepare a consumer
information pamphlet for distribution to policyholders regarding the mediation program.
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HB NO. 839
Proposed law provides that the insurer shall bear the cost of the mediation pursuant to
proposed law, which cost shall be reasonable as determined by the commissioner.
Proposed law provides that the commissioner shall promulgate rules or regulations,
including emergency rules or regulations, for a property insurance mediation program to be
administered by the commissioner pursuant to proposed law. The rules or regulations shall
provide for:
(1)The costs of the mediation.
(2)The processing of requests for and scheduling of the mediation.
(3)The qualifications for the mediators.
(4)The selection of the mediators.
(5)The attendance of the parties to the mediation.
(6)The criteria for the conduct of the mediation.
(7)The attendance of legal counsel.
(8)The allocation of the costs of the mediation including any actual costs incurred by
the parties in the event a party fails or refuses to appear at the mediation.
(9)The requirement that each party attending the mediation have the legal authority to
settle the full value of the claim.
(10)The requirement that the fees assessed by the administrator include a charge
necessary to defray the expenses of the commissioner related to his duties under
proposed law.
(11)Any other matters that the commissioner deems applicable, relevant and appropriate
for the implementation and administration of a property insurance mediation
program.
Proposed law deems all statements made and documents produced at the mediation to be
privileged and confidential pursuant to present law.
Proposed law provides that if the mediation results in a settlement of all or any portion of
disputed property claims, the settlement shall be reduced to writing by the mediator, shall
be signed by all parties, and shall become enforceable as a transaction or compromise
between the parties. Further requires the insurer to pay the sum agreed upon within 30 days
of the date the parties execute the written settlement agreement. Provides that any settlement
agreement reached between the parties is binding and acts as a release of the disputed
property claims that were presented and settled at the mediation. Additionally, provides that
the failure or refusal of the insurer to pay the full amount agreed upon in settlement shall
entitle the policyholder to a cause of action against the insurer pursuant to the provisions of
present law.
Proposed law provides that if the insurer fails to notify a policyholder of his right to request
mediation or if the insurer requests the mediation and the mediation results are rejected by
either party, the policyholder is not required to submit to or participate in any contractual
loss appraisal process regarding the property loss damage as a precondition to legal action
for breach of contract against the insurer for its failure to pay the policyholder's claims
covered by the policy.
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Proposed law provides that the commissioner may designate an administrator to carry out
any of the provisions of proposed law and may take this action by means of a written
contract or agreement.
Proposed law provides that, for purposes of proposed law, the term "claim" refers to any
dispute between an insurer and a policyholder relating to a material issue of fact. However,
"claim" shall not include a dispute:
(1)With respect to which the insurer has a reasonable basis to suspect 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, and the entire request for payment of a loss has been denied on
the basis of the material misrepresentation.
(4)With respect to which the amount in controversy is less than $1,000, unless the
parties mutually agree to mediate a dispute involving a lesser amount.
Effective January 1, 2017.
(Adds R.S. 22:1272)
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