(The Center Square) — Sen. Royce Duplessis, D-New Orleans, has been one of the more skeptical committee members as it relates to the cause of Louisiana’s auto insurance rates and what to do about it.
Most committee members and insurance industry representatives attribute the state’s high auto insurance rates to the high rate of claims and the higher rate of payouts and have offered legislation attempting to protect insurance companies.
Duplessis hasn’t been so sure.
During a recent committee exchange, Duplessis sparred with Insurance Commissioner Tim Temple over the role of profits in driving rates. Duplessis appeared to express interest in limiting the profitability of insurance companies.
“I don’t think the government should come in and say that we’re going to limit your profit, right? We don’t do that for grocery stores. We don’t tell them what they can charge for food,” Temple said.
“I haven’t made that suggestion yet,” Duplessis responded, seemingly leaving the door open for future debate.
Duplessis’ skepticism aligns with a bill he introduced last year aimed at limiting the factors insurers can use to set rates. The bill didn’t make it out of committee.
The proposed legislation would have prohibited insurers from using education level, employment status, home ownership, or credit information to set rates.
By eliminating these risk classifications and repealing provisions that protect the use of credit data, the bill could limit insurers’ ability to justify premium hikes, indirectly curbing their profit margins.
The senator’s stance drew a pointed question from fellow committee member Sen. Adam Bass, R-Bossier City.
“If insurance companies are making so much money and so much profit, why would they ever quit doing business in Louisiana?” Bass asked.
“Historically, if you do business here for any amount of time, over that period of time, you are losing money,” Temple said.
