HLS 20RS-205 ENGROSSED
2020 Regular Session
HOUSE BILL NO. 9
BY REPRESENTATIVE GAROFALO
INSURANCE/AUTOMOB ILE: Enacts the Omnibus Premium Reduction Act of 2020
1 AN ACT
2To amend and reenact Civil Code Articles 3492 and 3493.10, Code of Civil Procedure
3 Article 1732(1), and R.S. 22:1269(B), to enact R.S. 9:2800.25, and to repeal R.S.
4 22:333(E) and 32:295.1(E), relative to liability; to provide relative to civil liability
5 and to motor vehicle liability coverage; to extend the general prescriptive period for
6 delictual actions involving motor vehicle accidents; to prohibit the court from
7 awarding a plaintiff the amount of medical expenses reduced or paid by a collateral
8 source; to provide for definitions; to provide with respect to a jury trial in a lawsuit
9 arising from a motor vehicle accident; to limit the right of direct action against an
10 insurer; to provide relative to the requirement to wear safety belts while operating
11 a motor vehicle; to provide for the introduction of evidence of the failure to wear a
12 safety belt; to require certain annual rate filings with the commissioner of insurance;
13 to provide for a mandatory rate reduction under certain circumstances; to provide for
14 prospective application; to provide for an effective date; and to provide for related
15 matters.
16Be it enacted by the Legislature of Louisiana:
17 Section 1. The provisions of this Act shall be known as the "Omnibus Premium
18Reduction Act of 2020". Whereas motor vehicle accident claims comprise a major portion
19of the lawsuits filed in Louisiana's state courts, and whereas the enactment of civil justice
20reforms and their general applicability have a positive effect toward the reduction of the cost
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1of motor vehicle insurance, the Omnibus Premium Reduction Act of 2020 is designed to
2achieve a significant reduction in the premium rate of motor vehicle accidents and insurance
3by legislating in regard not only to specific motor vehicle accidents and insurance suits, but
4also to civil law issues of general applicability. A secondary purpose of the Omnibus
5Premium Reduction Act of 2020 is to further encourage all persons who own or operate
6motor vehicles on the public streets and highways of this state to comply with the Motor
7Vehicle Safety Responsibility Law by correcting the imbalances and abuses which are
8prevalent in Louisiana's current civil law and motor vehicle insurance systems thereby
9resulting in a direct cost savings to all citizens of the state of Louisiana.
10 Section 2. Civil Code Articles 3492 and 3493.10 are hereby amended and reenacted
11to read as follows:
12 Art. 3492. Delictual actions
13 Delictual Except as otherwise provided, delictual actions are subject to a
14 liberative prescription of one year. This prescription commences to run from the day
15 injury or damage is sustained. It does not run against minors or interdicts in actions
16 involving permanent disability and brought pursuant to the Louisiana Products
17 Liability Act or state law governing product liability actions in effect at the time of
18 the injury or damage.
19 * * *
20 Art. 3493.10. Delictual actions; two-year prescription; criminal act; operation or
21 control of a motor vehicle
22 Delictual actions for injury or damage arising from the operation or control
23 of any motor vehicle, aircraft, watercraft, or other means of conveyance or which
24 arise due to damages sustained as a result of an act defined as a crime of violence
25 under Chapter 1 of Title 14 of the Louisiana Revised Statutes of 1950, except as
26 provided in Article 3496.2, are subject to a liberative prescription of two years. This
27 prescription commences to run from the day injury or damage is sustained. It does
28 not run against minors or interdicts in actions involving permanent disability and
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1 brought pursuant to the Louisiana Products Liability Act or state law governing
2 product liability actions in effect at the time of the injury or damage.
3 Section 3. Code of Civil Procedure Article 1732(1) is hereby amended and reenacted
4to read as follows:
5 Art. 1732. Limitation upon jury trials
6 A trial by jury shall not be available in:
7 (1) A suit where the amount of no individual petitioner's cause of action
8 exceeds fifty five thousand dollars exclusive of interest and costs, except as follows:
9 (a) If an individual petitioner stipulates or otherwise judicially admits sixty
10 days or more prior to trial that the amount of the individual petitioner's cause of
11 action does not exceed fifty five thousand dollars exclusive of interest and costs, a
12 defendant shall not be entitled to a trial by jury.
13 (b) If an individual petitioner stipulates or otherwise judicially admits for the
14 first time less than sixty days prior to trial that the amount of the individual
15 petitioner's cause of action does not exceed fifty five thousand dollars exclusive of
16 interest and costs, any other party may retain the right to a trial by jury if that party
17 is entitled to a trial by jury pursuant to this Article and has otherwise complied with
18 the procedural requirements for obtaining a trial by jury.
19 (c) Notwithstanding Subsubparagraphs (a) and (b) of this Subparagraph, if,
20 as a result of a compromise or dismissal of one or more claims or parties which
21 occurs less than sixty days prior to trial, an individual petitioner stipulates or
22 otherwise judicially admits that the amount of the individual petitioner's cause of
23 action does not exceed fifty five thousand dollars exclusive of interest and costs, a
24 defendant shall not be entitled to a trial by jury.
25 * * *
26 Section 4. R.S. 9:2800.25 is hereby enacted to read as follows:
27 §2800.25. Recoverable medical expenses; collateral sources; limitations
28 A. For the purposes of this Section, the following terms shall have the
29 following meanings:
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1 (1) "Health insurance issuer" means any health insurance coverage through
2 a policy or certificate of insurance subject to regulation of insurance under state law,
3 health maintenance organization, employer sponsored health plan, the office of group
4 benefits, or an equivalent federal or state health plan.
5 (2) "Medical provider" means any healthcare provider, hospital, ambulance
6 service, or their heirs or assigns.
7 B. In cases where a plaintiff's medical expenses have been paid, in whole or
8 in part, by a health insurance issuer, Medicaid, or Medicare to a contracted or
9 participating medical provider, the plaintiff's recovery of medical expenses is limited
10 to the amount actually paid to the medical provider by the health insurance issuer,
11 Medicaid, or Medicare and any applicable cost sharing amount, and not the amount
12 billed.
13 C. In cases where a plaintiff's medical expenses are paid pursuant to the
14 Workers' Compensation Law as provided in R.S. 23:1020.1 et seq., a plaintiff's
15 recovery of medical expenses is limited to the amount payable under the medical
16 payments fee schedule of the Workers' Compensation Law.
17 D.(1) In an action for damages where a person suffers injury, death, or loss,
18 the court may receive evidence concerning any amount which has been paid or
19 contributed as of the date the court enters judgment by or on behalf of the claimant
20 or members of his immediate family to secure the claimant's right to any private
21 insurance benefit which he has received as a result of such injury, death, or loss.
22 (2) In an action for damages where a person suffers injury, death, or loss, the
23 court may receive evidence concerning the amount the health insurance issuer would
24 have paid if the medical bills would have been submitted by the claimant to his
25 health insurance issuer, Medicare, or Medicaid provider.
26 Section 5. R.S. 22:1269(B)is hereby amended and reenacted to read as follows:
27 §1269. Liability policy; insolvency or bankruptcy of insured and inability to effect
28 service of citation or other process; direct action against insurer
29 * * *
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1 B.(1) The injured person or his survivors or heirs mentioned in Subsection
2 A of this Section, at their option, shall have a right of direct action against the insurer
3 within the terms and limits of the policy; and, such action may be brought against the
4 insurer alone, or against both the insured and insurer jointly and in solido, in the
5 parish in which the accident or injury occurred or in the parish in which an action
6 could be brought against either the insured or the insurer under the general rules of
7 venue prescribed by Code of Civil Procedure Art. 42 only; however, such action may
8 be brought against the insurer alone only when at least one of the following applies:
9 (a) The insured has been adjudged bankrupt by a court of competent
10 jurisdiction or when proceedings to adjudge an insured bankrupt have been
11 commenced before a court of competent jurisdiction.
12 (b) The insured is insolvent.
13 (c) Service of citation or other process cannot be made on the insured.
14 (d)(b) When the The cause of action is for damages as a result of an offense
15 or quasi-offense between children and their parents or between married persons.
16 (e) When the insurer is an uninsured motorist carrier.
17 (f)(c) The insured is deceased.
18 (2) This right of direct action shall exist whether or not the policy of
19 insurance sued upon was written or delivered in the state of Louisiana and whether
20 or not such policy contains a provision forbidding such direct action, provided the
21 accident or injury occurred within the state of Louisiana. may be brought against the
22 insurer alone in the parish in which the accident or injury occurred or in the parish
23 in which an action could be brought against either the insured or the insurer under
24 the general rules of venue prescribed by Code of Civil Procedure Article 42 only.
25 Nothing contained in this Section shall be construed to affect the provisions of the
26 policy or contract if such provisions are not in violation of the laws of this state.
27 (3) When the circumstances enumerated in Paragraph (1) of this Subsection
28 do not apply, neither the injured person nor the survivors or heirs mentioned in
29 Subsection A of this Section shall have a right of direct action against the insurer.
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1 The injured person or his survivor or heirs shall bring an action against the insured,
2 wherein a court of competent jurisdiction may render a finding of liability and
3 damages against the insured. Nothing contained in this Section shall be construed to
4 affect the insured's right to enforce the provisions of the policy or contract against
5 the insurer.
6 * * *
7 Section 6. R.S. 22:333(E) and R.S. 32:295.1(E) are hereby repealed in their entirety.
8 Section 7. Pursuant to the provisions of this Act, every motor vehicle insurer
9authorized to transact business in the state of Louisiana shall make a motor vehicle policy
10rate filing with the Department of Insurance at least once every twelve months for the thirty-
11six-month period following the effective date of this Act and shall reduce rates when
12actuarially justified.
13 Section 8. For policies of personal private passenger automobile insurance issued
14or renewed one year following the effective date of this Act, each insurer shall file with the
15commissioner of insurance for approval premium rates which actuarially reflect the savings
16it anticipates as a result of this Act, which is presumed to be ten percent lower for each
17impacted coverage, when compared to the premium rates in effect for that coverage on the
18date of enactment. Each such insurer shall have the right to request all or partial relief from
19the presumed roll-back amount of ten percent on each impacted coverage, if it can
20demonstrate to the commissioner of insurance that it has not experienced a sufficient
21reduction in loss costs to actuarially justify the full amount of presumed savings of ten
22percent. Any filing with premium rates that provides for the ten percent reduction or more
23for each impacted coverage shall be deemed approved, if not disapproved, thirty days after
24filing. This Section does not prohibit an increase for any individual insurance policy
25premium if the increase results from an increase in the risk of loss.
26 Section 9. (A) This Act shall become effective on January 1, 2021.
27 (B) The provisions of Section 3 of this Act shall apply only to new causes of action
28that arise on or after the effective date of this Act.
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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 9 Engrossed 2020 Regular Session Garofalo
Abstract: Creates the Omnibus Premium Reduction Act of 2020 which increases the
general one-year prescriptive period for delictual actions arising from a vehicular
accident to a two-year prescriptive period, reduces the threshold for a jury trial to
$5,000, provides for reduced damages for amounts paid or payable from collateral
sources, repeals the limitation on presenting evidence of the failure to wear a safety
belt, and limits the right of direct action against an insurer.
Proposed law creates the Omnibus Premium Reduction Act of 2020, which has as its general
purpose the reduction of the cost of motor vehicle insurance by legislating in regard to civil
law and insurance policies.
Present law provides a general one-year liberative prescriptive period for delictual actions
(C.C. Art. 3492), and a two-year period for delictual actions for damages arising from an act
defined as a crime of violence, except for any act of sexual assault which is subject to a
liberative prescription of three years (C.C. Art. 3493.10).
Proposed law increases the general one-year prescriptive period for delictual actions for
injury or damages arising from the operation of any motor vehicle, aircraft, watercraft, or
other means of conveyance to a two-year prescriptive period and retains the liberative
prescription of three years for any act of sexual assault.
Present law (C.C.P. Art. 1732) authorizes a jury trial when the amount in controversy
exceeds $50,000.
Proposed law reduces the threshold for a jury trial to $5,000 for causes of action that arise
on or after Jan. 1, 2021.
Proposed law (R.S. 9:2800.25) provides that in cases where a plaintiff's medical expenses
have been paid, in whole or in part, by a health insurance issuer, Medicaid, or Medicare to
a medical provider, the plaintiff's recovery of medical expenses is limited to the amount
actually paid to the medical provider and not the amount billed.
Proposed law provides that payment for medical expenses is limited to the amount payable
pursuant to the fee schedule of the present law Worker's Compensation Law when that
present law is applicable.
Proposed law provides that in an action for damages where a person suffers injury, death,
or loss, the court may receive evidence of the following:
(1)Any amount which has been paid or contributed by or on behalf of the claimant to
secure his right to a private insurance benefit received as a result of the injury, death,
or loss.
(2)The amount the health insurance issuer would have paid if the medical bills would
have been submitted by the claimant to his health insurance issuer, Medicare, or
Medicaid provider.
Proposed law defines "health insurance issuer" and "medical provider".
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Present law (R.S. 22:1269 (B)) provides relative to liability policies and direct action against
an insurer.
Present law provides that an injured third party has the right to take direct legal action
against the insurer if that right is provided for within the terms and limits of the policy.
Provides for action against the insurer alone if at least one of the following applies:
(1)The insured has been adjudged bankrupt or bankruptcy proceedings have
commenced in a court of competent jurisdiction.
(2)The insured is insolvent.
(3)Service of citation or other process cannot be made on the insured.
(4)The cause of action is for damages resulting from an offense or quasi-offense
between children and parents or between married persons.
(5)The insurer is an uninsured motorist carrier.
(6)The insured is deceased.
Proposed law removes an action against the insurer alone under the following circumstances:
(1)The insured is insolvent.
(2)Service of citation or other process cannot be made on the insured.
(3)The insurer is an uninsured motorist carrier.
Proposed law further provides that if direct action is not available, the injured person or his
survivors or heir's shall bring an action against the insured in a court of competent
jurisdiction.
Proposed law provides that the insured's right to enforce the terms of the policy against the
insurer remains unaffected.
Present law provides that, if the accident or injury occurred within the state of Louisiana, the
right of direct action shall exist whether or not the policy of insurance was written or
delivered in the state of Louisiana and whether or not such policy contains a provision
forbidding such direct action.
Present law (R.S. 22:333(E)) relative to foreign or alien insurers provides that transacting
of business in this state constitutes a consent to being sued by the injured person or heirs in
a direct action as provided in present law.
Proposed law repeals present law.
Present law (R.S. 32:295.1(E)) provides that the failure to wear a safety belt in violation of
present law shall not be admitted to mitigate damages in any action to recover damages
arising out of the ownership, common maintenance, or operation of a motor vehicle, and the
failure to wear a safety belt in violation of present law shall not be considered evidence of
comparative negligence.
Proposed law repeals present law.
Proposed law requires every motor vehicle insurer authorized to transact business in La. to
make a motor vehicle policy rate filing with the Dept. of Insurance at least once every 12
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months for the 36 months following the effective date of proposed law and to reduce rates
when actuarially justified.
Proposed law further provides that for policies of personal private passenger automobile
insurance issued or renewed one year following the effective date of the proposed law, each
insurer shall file with the commissioner of insurance for approval premium rates which
actuarially reflect the savings it anticipates as a result of proposed law, which is presumed
to be 10% lower for each impacted coverage, when compared to the premium rates in effect
for that coverage on the date of enactment of proposed law. Also provides that each such
insurer shall have the right to request all or partial relief from the presumed roll-back amount
of 10% on each impacted coverage, if it can demonstrate to the commissioner of insurance
that it has not experienced a sufficient reduction in loss costs to actuarially justify the full
amount of presumed savings of 10%.
Proposed law further provides that any filing with premium rates that provide for the 10%
reduction or more for each impacted coverage shall be deemed approved, if not disapproved,
30 days after filing. Proposed law also provides that it does not prohibit an increase for any
individual insurance policy premium if the increase results from an increase in the risk of
loss.
Effective Jan. 1, 2021.
(Amends C.C. Arts. 3492 and 3493.10, C.C.P. Art. 1732(1), and R.S. 22:1269(B); Adds R.S.
9:2800.25; Repeals R.S. 22:333(E) and R.S. 32:295.1(E))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Civil Law and
Procedure to the original bill:
1. Make the two-year prescriptive period for delictual actions applicable to
vehicular accidents.
2. Revise the collateral source rule by limiting a plaintiff's recovery to amounts
actually paid and provide definitions.
3. Allow a party to submit evidence of insurance premiums paid.
4. Allow a party to submit evidence of amounts paid if the claimant would have
submitted a claim.
5. Remove the repeal of the direct action statute with limitations.
6. Add a requirement for insurers to file with the commissioner of insurance for
approval of premium rates reflecting anticipated savings.
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