House tweaks insurance bill
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A House committee amended a bill Tuesday to give the Louisiana legislative auditor access to ratemaking records of private insurance companies that the state holds confidentially.
Auditor Steve Theriot said he hopes to avoid a future court battle that was similar to the one he and state Insurance Commissioner Jim Donelon had recently over similar records involving the Louisiana Citizens Property Insurance Corp., the state’s insurer of last resort.
Theriot sued Donelon over access to Citizens’ records. They recently settled the case when Donelon set conditions for the auditors look at the records.
The Committee for House and Governmental Affairs approved without objection an amended House Bill 385. The measure would allow Citizens — rather than the state Department of Insurance — to do the surveys and make the calculations necessary to set the rates it charges for hurricane insurance policies.
The committee changed the bill to ensure that Theriot’s office would have access to the records Citizens would use to set its rates. “I certainly don’t want that contest again,” Theriot said about the possibility of going to court again over access to records.
Theriot’s auditors were drawn into the Citizens crisis after the state had to guarantee a $1 billion loan to pay damage claims from the 2005 hurricanes. The auditors discovered that Citizens administrators had failed to keep adequate records and could not authoritatively tell the state about its financial condition. Auditors also uncovered purchases and trips that raised questions.
Citizens is required to sell its policies that pay for damage caused by hurricanes at 10 percent above what the private market charges for similar policies. To determine that rate, the state Insurance Department surveys private companies for the prices they charge in particular regions, Theriot said. He said the argument was that pricing information is considered proprietary in the competitive insurance market and should be kept secret.
Theriot said he too would keep the information private because his only interest is to determine the accuracy of the quotes and the validity of the rates being charged by Citizens.
HB385 goes to the full House for debate.
Auditor Steve Theriot said he hopes to avoid a future court battle that was similar to the one he and state Insurance Commissioner Jim Donelon had recently over similar records involving the Louisiana Citizens Property Insurance Corp., the state’s insurer of last resort.
Theriot sued Donelon over access to Citizens’ records. They recently settled the case when Donelon set conditions for the auditors look at the records.
The Committee for House and Governmental Affairs approved without objection an amended House Bill 385. The measure would allow Citizens — rather than the state Department of Insurance — to do the surveys and make the calculations necessary to set the rates it charges for hurricane insurance policies.
The committee changed the bill to ensure that Theriot’s office would have access to the records Citizens would use to set its rates. “I certainly don’t want that contest again,” Theriot said about the possibility of going to court again over access to records.
Theriot’s auditors were drawn into the Citizens crisis after the state had to guarantee a $1 billion loan to pay damage claims from the 2005 hurricanes. The auditors discovered that Citizens administrators had failed to keep adequate records and could not authoritatively tell the state about its financial condition. Auditors also uncovered purchases and trips that raised questions.
Citizens is required to sell its policies that pay for damage caused by hurricanes at 10 percent above what the private market charges for similar policies. To determine that rate, the state Insurance Department surveys private companies for the prices they charge in particular regions, Theriot said. He said the argument was that pricing information is considered proprietary in the competitive insurance market and should be kept secret.
Theriot said he too would keep the information private because his only interest is to determine the accuracy of the quotes and the validity of the rates being charged by Citizens.
HB385 goes to the full House for debate.
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