The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Xavier I. Alexander.
DIGEST
SB 418 Original 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 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 that reductions in medical bills based upon write-offs or
write-downs by insurance companies or Medicare are not collateral sources and are not recoverable
as damages in civil litigation.
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 healthcare 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 payable under
the medical payments fee schedule of the WCL.
Proposed law provides that if a plaintiff chooses not to submit medical expenses for payment
pursuant to the WCL, and such medical expenses were eligible for payment under the WCL, then
recovery of damages for medical expenses is limited to the amount that would have been payable
had the medical expenses been submitted for payment under 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 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 cause of action is for damages as a result of an offense or quasi-offense between children
and their parents or between married persons.
(3)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's 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 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 authorizes the introduction of evidence of failure to wear a safety belt in order to
establish both comparative negligence and damages, except when the operator or passenger is under
16 years of age, or when the tortfeasor is operating a motor vehicle while intoxicated.
Proposed law requires that the total damages awarded to the injured person be reduced by 25% if a
party proves by a preponderance of the evidence that the injured person failed to wear a safety belt
at the time the injury occurred.
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.
Effective January 1, 2021.
(Amends C.C. Arts. 3492 and 3493.10, C.C.P. Art. 1732(1); R.S. 22:1269(B) and R.S. 32:295.1(E);
adds R.S. 9:2800.25; repeals R.S. 22:333(E))