Louisiana House Bill HB407

Louisiana 2019 Regular Session

• Introduced: 3/29/19
• Refer: 3/29/19
• Refer: 4/8/19
• Report Pass: 4/24/19
• Engrossed: 5/6/19
• Refer: 5/7/19
• Report Pass: 5/22/19
• Enrolled: 5/31/19
• Chaptered: 6/11/19
• Passed: 6/11/19

Caption

Provides relative to the refund of unearned premiums

Impact

The amendment to R.S. 22:885 is intended to streamline and simplify the refund process, removing administrative burdens from both mortgagees and insurers. By allowing for the automatic refund of unearned premiums to the entitled party, whether that be the insured or the mortgagee, the bill promotes quicker resolution and financial fairness for consumers. The time frame for refunds is explicitly defined, which could lead to enhanced consumer satisfaction and trust in the insurance system.

Summary

House Bill 407, introduced by Representative Chad Brown, amends existing Louisiana insurance law regarding the handling of unearned premiums following the cancellation of insurance policies. The bill specifically removes the requirement for mortgagees to provide written notice to insurers for unearned premium refunds. Instead, it mandates that insurers must refund the unearned portions of premiums to the insured or entitled parties within thirty days of cancellation, addressing the reimbursement process in a more straightforward manner. Alongside this, the bill clarifies existing provisions concerning penalties imposed due to policy cancellations.

Sentiment

The sentiment surrounding HB 407 appeared supportive, as it seeks to address common consumer grievances regarding delays in refunds and communication breakdowns between mortgagees and insurers. Stakeholders, particularly consumer advocacy groups, lauded the effort to protect insured parties and facilitate smoother financial transactions. However, some insurance industry representatives expressed concerns about the potential for increased claims on administrative processes due to the lack of written notice requirements, suggesting that this could lead to complications in tracking refund responsibilities.

Contention

The most notable point of contention during discussions revolved around the implications of eliminating the mortgagee notification requirement. While proponents emphasized the bill's potential to simplify processes and enhance consumer rights, critics warned that it could lead to confusion in cases where multiple parties have claims on the unearned premiums. Additionally, the prohibition of monetary penalties in certain cancellation scenarios stirred debate about the balance of power between insurers and insured parties, raising questions about the accountability of insurers under the new regulations.