HLS 22RS-1948 ENGROSSED
2022 Regular Session
HOUSE BILL NO. 967
BY REPRESENTATIVE SEABAUGH
INSURANCE/POLICIES: Repeals a prohibition on reducing liability limits for certain
costs
1 AN ACT
2To repeal R.S. 22:1272, relative to liability limits; to repeal a prohibition on reducing
3 liability limits on certain insurance policies for certain costs.
4Be it enacted by the Legislature of Louisiana:
5 Section 1. R.S. 22:1272 is hereby repealed in its entirety.
6 Section 2. This Act shall become effective upon signature by the governor or, if not
7signed by the governor, upon expiration of the time for bills to become law without signature
8by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
9vetoed by the governor and subsequently approved by the legislature, this Act shall become
10effective on the day following such approval.
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 967 Engrossed 2022 Regular Session Seabaugh
Abstract: Repeals a prohibition on reducing liability limits for certain costs.
Present law provides that liability limits contained in a policy or contract of insurance issued
by an authorized insurer shall not be reduced by the expenses of defense in a suit under the
policy, unless the commissioner executes a written waiver to authorize the policy liability
limits to be reduced by the defense expenses.
Present law provides that the prohibition on reducing liability limits in present law does not
apply to personal lines, medical malpractice insurance, commercial vehicle insurance, or
commercial general liability insurance.
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HB NO. 967
Present law provides that the prohibition on reducing liability limits in present law shall be
waived by the commissioner for insurance policies covering professional liability other than
medical malpractice, directors' and officers' liability, errors and omissions liability, pollution
liability, employment practices liability, cyber risk liability, information security and privacy
liability, patent defense or other intellectual property infringement liability, and commercial
liability coverages sold in combination.
Present law provides that the prohibition on reducing liability limits in present law may be
waived by the commissioner for other types of insurance, upon consideration by the
commissioner of the level of market competition, the nature and design of the product, the
availability of insurance coverage, and other relevant factors.
Present law provides that every policy or contract for which a waiver is executed by the
commissioner pursuant to present law shall be subject to the following requirements:
(1)Defense expenses used to reduce the liability limits on the policy or contract shall
not include overhead costs, adjusting expenses, or other expenses incurred by the
insurer in the ordinary course of business.
(2)Defense expenses used to reduce the liability limits shall include only reasonable
attorney fees and expenses directly connected to the insurer's defense of a specific
liability claim on behalf of an insured and any other litigation expenses directly
arising from the defense of a specific liability claim.
(3)The inclusion of defense expenses shall not exhaust the entire amount of liability
coverage.
Present law provides that the commissioner may limit the amount of defense expenses used
to reduce the liability limits or establish a minimum amount of liability coverage from which
defense expenses shall not be deducted.
Present law provides that the commissioner may limit or define the amount of expenses that
reduce the liability limits for all or specific type of insurance coverage
Present law provides that any policy or contract of insurance containing terms that require
a waiver pursuant to present law shall include a separate notice or inclusion on the
declaration page stating that the insurance policy or contract includes defense expenses
which may be deducted from the liability limits of the policy. Present law provides that this
notice shall be prominently printed or stamped in bold on the policy or contract and shall not
be less than a ten-point type.
Proposed law repeals present law in its entirety.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Repeals R.S. 22:1272)
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