Provides bad-faith penalties for certain self insurers. (8/1/20)
The implementation of SB 85 is expected to have a notable impact on the regulation of self-insurers in Louisiana, as it brings these entities under the ambit of existing insurance laws regarding unfair and deceptive practices. Currently, individuals or entities that qualify as self-insurers—those with more than 25 motor vehicles registered or owning property valued at $100,000 or more—are permitted to operate without the same regulatory scrutiny as traditional insurers. By making them subject to the established standards, the bill enhances consumer protections and promotes fair practices in the market.
Senate Bill 85, introduced by Senator Connick, pertains to the regulation of self-insurers within the state of Louisiana, specifically focusing on the application of unfair trade practice prohibitions to those holding a certificate of self-insurance. The bill aims to ensure that self-insurers are subject to the same unfair or deceptive trade practices standards that traditional insurers must adhere to. This change is significant in the context of the automotive industry, where self-insurance is a common practice for those managing multiple vehicles. The bill is set to take effect on August 1, 2020.
Overall, the sentiment surrounding SB 85 appears to be supportive, particularly among consumer advocacy groups and those concerned with ensuring fair treatment in the insurance market. Proponents argue that this bill addresses a gap in regulation that has allowed some self-insurers to operate without accountability. However, there may be concerns from self-insurers regarding the potential for increased scrutiny and the burden of additional compliance requirements that could arise from the new regulations.
While the bill generally received support, there could be contention around how these changes will be enforced and the implications for those who are currently self-insuring. Self-insurers might express worries about the added legal liabilities and penalties for non-compliance with the newly imposed standards. The legislative discussions could highlight disparities in opinions on the balance between regulatory oversight and the rights of individuals or entities choosing to self-insure.