RDCSB418 3645 2620
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)]
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 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 otherwise retains the one-, two-, and
three-year prescriptive periods.
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 $35,000, except for tort actions, for
which the threshold is $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 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 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
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 the following:
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(1)Any amount which has been paid or contributed from the date of injury through the
date the court 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.
(2)The amount the health insurance issuer would have paid if the claimant's medical
bills would have been submitted by the claimant to this health insurance issuer or
Medicare or Medicaid provider.
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 cause of action is for damages resulting from an offense or quasi offense
between children and parents or between married persons.
(3)When the plaintiff is seeking recovery pursuant to an unisured or underinsured
policy.
(4)The insured is deceased.
Proposed law provides that in a direct action against the insurer, the insured, and not the
insurer, shall be the named party in the caption.
Present law provides that a direct action may be brought in the parish in which the accident
or injury occurred or in the parish in which the action could be brought against either the
insured or the insurer under the general rules of venue prescribed by present law.
Proposed law provides that the direct action may be brought in the parish in which the
accident or injury occurred or in the parish in which the action could be brought against the
insured under the general rules of venue.
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.
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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.
Proposed law shall be prospective to new causes of action filed on or after 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. 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
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
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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.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Civil Law and
Procedure to the reengrossed bill:
1. Apply the proposed $5,000 jury trial threshold to tort actions, only, and lowers
the jury trial threshold for all other actions to $35,000.
2. Remove from the definition of "cost sharing" amounts owed, but not paid, by the
plaintiff.
3. Limit the time period for which the court may receive evidence of the amount of
insurance premiums paid.
4. Allow the court to receive evidence concerning the amount the health insurer
would have paid if the claimant had submitted medical bills to the insurer.
5. Remove the right of direct action against the insurer in cases where the insured
is insolvent or service of process cannot be made on the insured.
6. Provide that in a direct action against the insurer, the insured shall be the named
party in the caption.
7. Limit venue for direction actions brought against the insurer to the parish where
the accident or injury occurred or where an action may be brought against the
insured.
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8. Remove the repeal of present law relative to the direct action against a foreign
insurer.
9. Provide for prospective application.
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