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Legislative Update

The 2017 Regular Session has come and gone. We are happy to report that we had a quiet Session and were successful in many ways. We provide you with the list of all the bills we took a position on as well as those we were just monitoring below, but we'd like to point out a few that we feel you should pay special attention to. Please be sure to click on the links to read the bill/act in its entirety as well as to see the latest action if the bill has been noted that it has been sent to the Governor.

HB 407, which was a jointly sponsored bill by PIA, IIABL, HAFA, NAIFA and LAHU that allows for producer fees for individual and group health insurance policies passed and will become effective 8/1/17 as Act 63. As you know, it was interpreted by DOI that agents could not charge a fee for individual health policies, so we worked with Rep. Huval to introduce this legislation that allows producers to negotiate charges, fees and any other form of compensation directly with the insured for an individual health policy. It requires the expenses and fees charged on an individual health insurance policy be disclosed to the insured on a separate document that the insured will sign. The producer must also disclose on this same form that the insured may purchase the same health insurance policy online or by contacting a healthcare navigator and will not incur a fee or expenses. DOI will be sending out a bulletin shortly on this as well as they are working on a standard form that the producers can use. Be on the lookout for this!

HB 408, which PIA supported and requires an insurer to provide a new producer of record with a new quotation or proposal regardless of any other outstanding quotation or proposal, passed and will become effective 8/1/17 as Act 64. It also reduces the notice time from 15 days to 10 days.

SB 44, which PIA supported and allows a non-resident producer to sell policies issued by Louisiana Citizens Property Insurance Corporation when the state of residence allows Louisiana resident producers to sell policies issued by that state's residual market mechanism, passed and will become effective 8/1/17 as Act 182.

Other bills that passed that we were monitoring that may be of interest include the following:

HB 89, which allows employees of insurance companies that are not licensed claims adjusters to adjust certain losses that do not exceed $500, passed and will become effective 8/17/17 as Act 29.

SB 45, which provides relative to the definition of ocean marine insurance, passed and will become effective 8/1/17 as Act 183.

SB 117, requires certain insurance producers to maintain professional liability insurance, passed and has been sent to the Governor.

HB 607, creates insurance bar code to be displayed on a vehicle's inspection sticker, was substituted as HB 692 and passed and has been sent to the Governor.

HB 287, provides for the return of unearned premium to the mortgagee as long as the mortgagee makes notice to the insured that the monies funded were from the mortgagee, passed and has been sent to the Governor.

HB 392, which prohibits insurers from combining a higher classified public fire protection area with a lower classified public fire protection area for the purpose of determining rates for both districts, passed and will become effective 8/1/17 as Act 61.

HB 393, which provides for the elimination of contents coverage on residential properties following a declared disaster, passed and will become effective 1/1/18 as Act 219.

HB 503, which changes the dual P&C and L&H license renewal from having to renew each line alternating years to renewing both licenses every other year, passed and will become effective 1/1/18 as Act 9.

Please click here for the complete legislative report.

Upcoming PIA Events
07/12/2017 -- New Orleans Chapter Meeting

07/22/2017 -- PIA of Louisiana 74th Annual Convention

07/22/2017 -- YIPs Hospitality Suite at the PIA of Louisiana Convention

07/23/2017 -- YIPs Hospitality Suite at the PIA of Louisiana Convention

07/23/2017 -- PIA of Louisiana 74th Annual Convention

07/24/2017 -- PIA of Louisiana 74th Annual Convention

07/24/2017 -- YIPs Hospitality Suite at the PIA of Louisiana Convention

07/25/2017 -- PIA of Louisiana 74th Annual Convention

08/09/2017 -- Baton Rouge Chapter Meeting

08/10/2017 -- Saints Kickoff Party

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PIA Stands Firm in Defense of Agent Commissions

PIA National has reaffirmed its strong opposition to any legislation that would reduce the reimbursement rate for Write Your Own flood insurance carriers. PIA's statement follows an initial markup by the House Financial Services Committee on June 15, which passed two of seven bills to reform and reauthorize the National Flood Insurance Program (NFIP).

The WYO reimbursement rate is used by carriers to pay agent commissions, and most WYOs have acknowledged that, for them to remain in the program, they intend to pass any cut to the WYO rate on to agents in the form of commission cuts, similar to what was done in healthcare.

"Our position is straightforward: As an agents' association, PIA will not endorse a provision which will likely result in a cut to agent compensation," said PIA National Executive Vice President & CEO Mike Becker, in a statement issued on Friday June 16. "Accordingly, PIA will continue to oppose this legislation."

The legislation includes several provisions, like including a multi-year reauthorization, improving the claims process, and taking steps to encourage the private market to sell policies, that PIA National supports. However, PIA opposes the entirety of the legislation because of the agent compensation issue.

PIA cannot support this legislation due to the cut to the WYO reimbursement rate and the cuts to agent compensation it would engender. PIA is the only agent group to oppose the legislation over this issue. When it comes to defending PIA members' commissions, PIA refuses to be neutral.

Commercial Prices Nearly Flat in Q1

According to Willis Towers Watson PLC's Commercial Lines Insurance Pricing Survey (CLIPS), price changes reported by commercial insurers averaged less than 1 percent for the sixth consecutive quarter, following a moderating trend in price increases that began in the first quarter of 2013. The CLIPS indicated that commercial insurance prices in the United States were nearly flat during the first quarter of 2017.

Price changes in the first quarter for most lines of business were fairly consistent with changes reported in the fourth quarter, said Willis Towers Watson. Four lines — workers' compensation, commercial property, directors and officers, and surety — indicated modest price decreases. Price changes were fairly similar across segments, though slightly positive for small accounts, and flat for midmarket, large, and specialty accounts.

"Despite ample capital and benign claim cost inflation trends, the commercial P&C insurance market has exercised considerable discipline as a whole over the past couple of years," said Serhat Guven, Willis Towers Watson's Americas property and casualty sales practice leader.

Thanks to Our 2017 PIA Partners:

American Strategic Insurance (ASI)

Capital Premium Financing

LUBA Workers' Comp

Markel FirstComp

SageSure Insurance Managers, LLC

Stonetrust Commercial Ins. Co.