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2020 Regular Session
SENATE BILL NO. 418
BY SENATOR TALBOT
LIABILITY INSURANCE. Enacts the Omnibus Premium Reduction Act of 2020. (1/1/21)
1 AN ACT
2 To 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 R.S. 32:295.1(E), relative to liability; to provide relative to civil
5 liability and to motor vehicle liability coverage; to extend the general prescriptive
6 period for delictual actions involving motor vehicle accidents; to prohibit the court
7 from awarding a plaintiff the amount of medical expenses reduced or paid by a
8 collateral source; to provide relative to collateral source, prescription, jury trials, and
9 jury trial thresholds under certain circumstances; to provide relative to the right of
10 direct action against an insurer; to repeal provisions prohibiting certain evidence
11 regarding the failure to wear safety belts; to require certain annual rate filings with
12 the commissioner of insurance; to provide for a mandatory rate reduction under
13 certain circumstances; to provide for an effective date; and to provide for related
14 matters.
15 Be it enacted by the Legislature of Louisiana:
16 Section 1. The provisions of this Act shall be known as the "Omnibus Premium
17 Reduction Act of 2020". Whereas motor vehicle accident claims comprise a major portion
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1 of the lawsuits filed in Louisiana's state courts, and whereas the enactment of civil justice
2 reforms and their general applicability have a positive effect toward the reduction of the cost
3 of motor vehicle insurance, the Omnibus Premium Reduction Act of 2020 is designed to
4 achieve a significant reduction in the premium rate of motor vehicle accidents and insurance
5 by legislating in regard not only to the specific motor vehicle accidents and insurance suits,
6 but also to civil law issues of general applicability. A second purpose of the Omnibus
7 Premium Reduction Act of 2020 is to further encourage all persons who own or operate
8 motor vehicles on the public streets and highways of this state to comply with the Motor
9 Vehicle Safety Responsibility Law by correcting the imbalances and abuses which are
10 prevalent in Louisiana's current civil law and motor vehicle insurance systems, thereby
11 resulting in a direct cost savings to all citizens of the state of Louisiana.
12 Section 2. Civil Code Article 3492 and 3493.10 are hereby amended and reenacted
13 to read as follows:
14 Art. 3492. Delictual actions
15 Delictual actions Except as provided in Civil Code Article 3493.10,
16 delictual actions are subject to a liberative prescription of one year. This
17 prescription commences to run from the day injury or damage is sustained. It does
18 not run against minors or interdicts in actions involving permanent disability and
19 brought pursuant to the Louisiana Products Liability Act or state law governing
20 product liability actions in effect at the time of the injury or damage.
21 * * *
22 Art. 3493.10. Delictual actions; two-year prescription; criminal act
23 Delictual actions for injury or damage arising from the operation or
24 control of any motor vehicle, aircraft, watercraft, or other means of conveyance,
25 or those which arise due to damages sustained as a result of an act defined as a crime
26 of violence under Chapter 1 of Title 14 of the Louisiana Revised Statutes of 1950,
27 except as provided in Article 3496.2, are subject to a liberative prescription of two
28 years. This prescription commences to run from the day injury or damage is
29 sustained. It does not run against minors or interdicts in actions involving
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1 permanent disability and brought pursuant to the Louisiana Products Liability
2 Act or state law governing product liability actions in effect at the time of the
3 injury or damage.
4 Section 3. Code of Civil Procedure Article 1732(1) is hereby amended and reenacted
5 to read as follows:
6 Art. 1732. Limitation upon jury trials
7 A trial by jury shall not be available in:
8 (1) A suit where the amount of no individual petitioner's cause of action
9 exceeds fifty five thousand dollars exclusive of interest and costs, except as follows:
10 (a) If an individual petitioner stipulates or otherwise judicially admits sixty
11 days or more prior to trial that the amount of the individual petitioner's cause of
12 action does not exceed fifty five thousand dollars exclusive of interest and costs, a
13 defendant shall not be entitled to a trial by jury.
14 (b) If an individual petitioner stipulates or otherwise judicially admits for the
15 first time less than sixty days prior to trial that the amount of the individual
16 petitioner's cause of action does not exceed fifty five thousand dollars exclusive of
17 interest and costs, any other party may retain the right to a trial by jury if that party
18 is entitled to a trial by jury pursuant to this Article and has otherwise complied with
19 the procedural requirements for obtaining a trial by jury.
20 (c) Notwithstanding Subsubparagraphs (a) and (b) of this Subparagraph, if,
21 as a result of a compromise or dismissal of one or more claims or parties which
22 occurs less than sixty days prior to trial, an individual petitioner stipulates or
23 otherwise judicially admits that the amount of the individual petitioner's cause of
24 action does not exceed fifty five thousand dollars exclusive of interest and costs, a
25 defendant shall not be entitled to a trial by jury.
26 * * *
27 Section 4. R.S. 9:2800.25 is hereby enacted to read as follows:
28 §2800.25. Recoverable medical expenses; collateral sources; limitations;
29 evidence
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1 A. For the purpose of this Section:
2 (1) "Health insurance issuer" means any health insurance coverage
3 through a policy or certificate of insurance subject to regulation of insurance
4 under state law, health maintenance organization, employer sponsored health
5 plan, the office of group benefits, and an equivalent federal or state health plan.
6 (2) "Medical provider" means any health care provider, hospital,
7 ambulance service, or their heirs or assignees.
8 (3) "Cost sharing" means copayments, coinsurance, deductibles, and any
9 other amounts which have been paid or are owed by the plaintiff.
10 B. In cases where a plaintiff's medical expenses have been paid, in whole
11 or in part, by a health insurance issuer, Medicaid, or Medicare to a contracted
12 or participating medical provider, the plaintiff's recovery of medical expenses
13 is limited to the amount actually paid to the medical provider by the health
14 insurance issuer, Medicaid, or Medicare and any applicable cost sharing
15 amount paid or owed by the plaintiff, and not the amount billed.
16 C. In cases where a plaintiff's medical expenses are paid pursuant to the
17 Workers' Compensation Law as provided in R.S. 23:1020.1 et seq., a plaintiff's
18 recovery of medical expenses is limited to the amount payable under the
19 medical payments fee schedule of the Workers' Compensation Law.
20 D. In an action for damages where a person suffers injury, death, or loss,
21 the court may receive evidence concerning any amount which has been paid or
22 contributed as of the date it enters judgment, by or on behalf of, the claimant
23 or members of his immediate family to secure his right to any private insurance
24 benefit which he has received as a result of such injury or death.
25 Section 5. R.S. 22:1269(B) is hereby amended and reenacted to read as follows:
26 §1269. Liability policy; insolvency or bankruptcy of insured and inability to effect
27 service of citation or other process; direct action against insurer
28 * * *
29 B.(1) The injured person or his survivors or heirs mentioned in Subsection
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1 A of this Section, at their option, shall have a right of direct action against the insurer
2 within the terms and limits of the policy; and, such action may be brought against the
3 insurer alone, or against both the insured and insurer jointly and in solido, in the
4 parish in which the accident or injury occurred or in the parish in which an action
5 could be brought against either the insured or the insurer under the general rules of
6 venue prescribed by Code of Civil Procedure Art. 42 only; however, such action may
7 be brought against the insurer alone only when at least one of the following applies:
8 (a) The insured has been adjudged bankrupt by a court of competent
9 jurisdiction or when proceedings to adjudge an insured bankrupt have been
10 commenced before a court of competent jurisdiction.
11 (b) The insured is insolvent.
12 (c) Service of citation or other process cannot be made on the insured.
13 (d) When the cause of action is for damages as a result of an offense or quasi-
14 offense quasi offense between children and their parents or between married
15 persons.
16 (e)When the insurer is an uninsured motorist carrier. When the plaintiff is
17 seeking recovery pursuant to an uninsured or underinsured policy.
18 (f) The insured is deceased.
19 (2) This right of direct action shall exist whether or not the policy of
20 insurance sued upon was written or delivered in the state of Louisiana and whether
21 or not such policy contains a provision forbidding such direct action, provided the
22 accident or injury occurred within the state of Louisiana. may be brought against
23 the insurer alone in the parish in which the accident or injury occurred or in the
24 parish in which an action could be brought against either the insured or the
25 insurer under the general rules of venue prescribed by Code of Civil Procedure
26 Article 42 only. Nothing contained in this Section shall be construed to affect the
27 provisions of the policy or contract if such provisions are not in violation of the laws
28 of this state.
29 (3) When the circumstances enumerated in Paragraph (1) of this
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1 Subsection do not apply, neither the injured person nor the survivors or heirs
2 mentioned in Subsection A of this Section shall have a right of direct action
3 against the insurer. The injured person or his survivor or heirs shall bring an
4 action against the insured, wherein a court of competent jurisdiction may
5 render a finding of liability and damages against the insured. Nothing contained
6 in this Section shall be construed to affect the insured's right to enforce the
7 provisions of the policy or contract against insurer.
8 * * *
9 Section 6. R.S. 22:333(E) and R.S. 32:295.1(E) are hereby repealed in their entirety.
10 Section 7. Pursuant to the provisions of this Act, every motor vehicle insurer
11 authorized to transact business in the state of Louisiana shall make a motor vehicle policy
12 rate filing with the Department of Insurance at least once every twelve months for the
13 thirty-six-month period following the effective date of this Act and shall reduce rates when
14 actuarially justified.
15 Section 8. For policies of personal private passenger automobile insurance issued or
16 renewed one year following the effective date of this Act, each insurer shall file with the
17 commissioner of insurance for approval premium rates which actuarially reflect the savings
18 it anticipates as a result of this Act, which is presumed to be ten percent lower for each
19 impacted coverage, when compared to the premium rates in effect for that coverage on the
20 date of enactment. Each such insurer shall have the right to request all or partial relief from
21 the presumed roll-back amount of ten percent on each impacted coverage, if it can
22 demonstrate to the commissioner of insurance that it has not experienced a sufficient
23 reduction in loss costs to actuarially justify the full amount of presumed savings of ten
24 percent. Any filing with premium rates that provides for the ten percent reduction or more
25 for each impacted coverage shall be deemed approved, if not disapproved, thirty days after
26 filing. This Section does not prohibit an increase for any individual insurance policy
27 premium if the increase results from an increase in the risk of loss.
28 Section 9. The provisions of Section 3 of this Act regarding limitations upon jury
29 trials shall have prospective application only and shall not apply to a cause of action arising
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1 or action pending prior to the effective date of this Act.
2 Section 10. This Act shall become effective on January 1, 2021.
The original instrument was prepared by Xavier I. Alexander and the
following digest, which constitutes no part of the legislative instrument, was
prepared by Margaret M. Corley.
DIGEST
SB 418 Reengrossed 2020 Regular Session Talbot
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 legislation 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.
Proposed law (R.S. 9:2800.25) provides for definitions:
(1)"Health insurance issuer" means a health insurance coverage through a policy or
certificate of insurance subject to regulation of insurance under state law, health
maintenance organization, employer sponsored health plan, the office of group
benefits, and an equivalent federal or state health plan.
(2)"Medical provider" means any health care provider, hospital, ambulance service, or
their heirs or assignees.
(3)"Cost sharing" means copayments, coinsurance, deductibles, and any other amounts
which have been paid or are owed by the plaintiff.
Proposed law 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 contracted or
participating medical provider, the plaintiff's recovery of medical expenses is limited to the
amount actually paid to the medical provider by the health insurance issuer, Medicaid, or
Medicare and any applicable cost sharing amount paid or owed by the plaintiff, and not the
amount billed.
Proposed law provides that when a plaintiff's medical expenses have been paid by a health
insurance company or Medicare, plaintiff's recovery of medical expenses is limited to the
amount actually paid to the health care provider by the insurer or Medicare, and not the
amount billed.
Proposed law provides that where a plaintiff's medical expenses are paid pursuant to the
Workers' Compensation Law (WCL), recovery of medical expenses is limited to the amount
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payable under the medical payments fee schedule of the WCL.
Proposed law further provides that in an action where a person suffers injury, death, or loss,
the court may receive evidence concerning any amount which has been paid or contributed
as of the date it enters judgment, by or on behalf of, the claimant or members of his
immediate family to secure his right to any private insurance benefit which he has received
as a result of such injury or death.
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 by a court of competent jurisdiction or
proceedings to adjudge an insured bankrupt have been commenced before 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 provides for action against the insurer alone within the terms and limits of the
policy if at least one of the following applies:
(1)The insured has been adjudged bankrupt by a court of competent jurisdiction or
proceedings to adjudge an insured bankrupt have been commenced before 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)When the plaintiff is seeking recovery pursuant to an unisured or underinsured
policy.
(6)The insured is deceased.
Proposed law further provides that if none of the above circumstances are applicable, the
injured person or his survivors or heir shall bring an action against the insured.
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
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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 this provision.
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 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 this provision.
Proposed law provides that pursuant to its provisions every motor vehicle insurer authorized
to transact business in the state shall make a motor vehicle policy rate filing with the Dept.
of Insurance at least once every 12 months for the 36-month period following the effective
date of the proposed law and shall 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 the 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 the 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.
Proposed law provides that the provisions of proposed law regarding limitations upon jury
trials shall have prospective application only and shall not apply to a cause of action arising
or action pending prior to the effective date of proposed law.
Effective January 1, 2021.
(Amends C.C. Arts. 3492 and 3493.10, C.C.P. Art. 1732(1), and R.S. 22:1269(B); enacts
R.S. 9:2800.25; repeals R.S. 22:333(E) and R.S. 32:295.1(E))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Judiciary A to the
original bill
1. Provides for technical changes.
2. Provides for definitions:
(a) "Health insurance issuer" means a health insurance coverage through
a policy or certificate of insurance subject to regulation of insurance
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under state law, health maintenance organization, employer-
sponsored health plan, the office of group benefits, and an equivalent
federal or state health plan.
(b)"Medical provider" means any health care provider, hospital,
ambulance service, or their heirs or assignees.
3. Provides for proposed law 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 contracted or participating medical provider, the plaintiff's
recovery of medical expenses is limited to the amount actually paid to the
medical provider by the health insurance issuer, Medicaid, or Medicare and
any applicable cost sharing amount, and not the amount billed.
4. Repeals provisions of present law (R.S. 32:295.1(E)) that provides that the
failure to wear a safety belt in violation shall not be admitted to mitigate
damages in any action to recover damages arising out of the ownership,
common maintenance, or operation of motor vehicle, and the failure to wear
a safety belt in violation of this Section shall not be considered evidence of
comparative negligence.
5. Provides that the provisions of proposed law regarding limitations upon jury
trials shall have prospective application only and shall not apply to a cause
of action arising or action pending prior to the effective date of proposed law.
Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill
1. Provides for technical changes.
2. Provides for a definition of "cost sharing" to mean copayments, coinsurance,
deductibles, and any other amounts which have been paid or are owed by the
plaintiff.
3. Retains portions of present law and provides for action against the insurer
alone if at least one of the following applies:
(a)The insured is insolvent.
(b)Service of citation or other process cannot be made on the insured.
4. Provides for action against the insurer alone when the plaintiff is seeking
recovery pursuant to an unisured or underinsured policy.
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