THE 2025 LEGISLATIVE SESSION: UPDATES THAT MATTER TO YOU
BENALBRIGHT IIABLPRESIDENTANDCEO
In this article, IIABL President and CEO Ben Albright provides an important update on key insurance bills moving quickly in the 2025 legislative session.
The 2025 legislative session is drawing to a close. The final day is next week (6/12), and we’re starting to dot i’s and cross t’s on this year’s insurance legislation as the legislators turn their attention to final approval of the budget. Here’s an update on the fate of our key bills:
HB 34 by Rep. Glorioso - Medical Transparency – transparency around past medical costs for juries to encourage reasonable rewards and eliminate phantom damages.
Replaced by SB 231 by Sen. Reese. Currently awaiting final passage in the House which we hope will happen on Sunday.
HB 427 by Rep. Bamberg – Reversionary trust for future medicals in lawsuits.
Died in Jud. A. A study resolution was created to study the issue for another attempt next session.
HB 431 by Rep. Chenevert - Modified Comparative Fault – Limit damage recovery if the plaintiff is found to be 51 percent or more at fault. Louisiana is an outlier in current law, and this will align with 38 other states that utilize a version of modified comparative fault.
Signed by the governor.
HB 450 by Rep. Melerine - Housely Presumption – eliminate the presumption that injuries are caused by an accident. Brings us in line with other states.
Signed by the governor.
HB 434 by Rep. DeWitt – No Pay No Play – increases cap to $100K
Signed by the governor
HB 435 by Rep. Egan: - General damages cap at $5 million.
Died in Jud. A
HB 443 by Rep. Henry – Pre-suit notice to defendant.
Died in Jud. A
HB 437 by Rep. Firment – Loss settlement practices, including signed proof of loss forms. This has been highly requested by reinsurance markets, amongst others.
Passed both houses, awaiting concurrence in the House.
HB 148by Rep. Wiley – The governor’s bill to blame Commissioner Temple for the high auto rates. This bill was amended in the Senate and got even worse. Added a component regarding confidentiality of insurer rate filings and a component giving the commissioner the authority to retroactively determine a rate to be “excessive”.
Insurance companies have indicated that the final version of this bill is a significant problem. It could impact their willingness to write business in Louisiana. The governor has been unwilling to accept changes, but we expect to try to amend some of the worst provisions in next year’s legislative session.
Signed by the governor.
Continued from page 6
The last couple of weeks have seen focus shift to some of the ancillary insurance bills in the session, after the hot topics listed above had been fully debated. IIABL has spent a significant amount of time lobbying to protect agents from potential new E&O exposures that the legislature might inadvertently be creating. HB 379 by Rep. Wright has gotten some recent news coverage. It allows insurers to offer a policy with binding arbitration. This means that in the case of a claims dispute, the policyholder would give up their right to a jury trial, and the matter would be settled by an arbitrator. There are some policyholder safeguards built into the bill:
1.If an insurer offers a policy with this form, they must also offer a comparable policy WITHOUT the binding arbitration form
2.The insurer must offer an actuarially sound premium discount in exchange for the policyholder giving up their right to sue
3.The insurer must get a form signed that contains disclosures about what rights they are giving up by accepting this policy
This provision is what has IIABL worried
With flashbacks to lawsuits over UM Selection forms, IIABL is working hard to get an amendment that clearly states that no cause of action can be undertaken against the insurer or the agent because of the signature requirement.
We believe that the commissioner’s regulatory authority is a more appropriate enforcement mechanism than civil suits
A similar provision exists within HB 356 by Rep. Braud. This bill originally required all insurance companies to offer a stated value policy for any amount equal to or greater than the remainder of the property’s mortgage, at the request of the policyholder. While the mandatory offer provision has been removed, there is still a provision that requires a signature from the policyholder on a form that explains the risks of such a policy, in the amended bill. Again, IIABL is working to protect agents against potential frivolous lawsuits by ensuring that the department of insurance is the enforcement mechanism, not tort actions.
Overall, there has been some good and some bad coming out of this session. I’m optimistic that the long-term results will be positive, but there’s no doubt that there’s more work to do. We haven’t still haven’t achieved enough reform on legal system abuse reform. We need to fix some of the damage done by the governor’s HB 148, this year. And the work will continue in next year’s session. As usual, IIABL will be doing a series of events around the state to provide more detail on the legislative changes that agents need to understand. Until then, please let me know if there is anything else we can do for you. That’s the good news. The bills that we believe can have a significant impact on the health of our insurance markets are moving through the process. However, as I’ve been telling everyone who asks: it’s too soon to know what to expect. The biggest hurdle in this process is the Senate Judiciary A committee, and that is still in the future of all of these bills. Over the next couple of weeks, we should learn more as these bills move over to the Senate side.
A significant narrative this session, that you may have read about in the newspaper, is the public disagreement on reform policy between Commissioner Temple and Governor Landry. Commissioner Temple is fully supportive of the key legal system abuse reforms that we believe would have a significant impact, bringing our rates closer to surrounding states. Governor Landry claims to be pursuing a “balanced approach” between insurance industry and plaintiff attorney viewpoints, but his package does not include the bills that we believe will have a significant impact. Thus far, the biggest flashpoint for this confrontation has been HB 576 by Rep. Robby Carter. This bill, derived directly from the trial bar, contends that Commissioner Temple needs additional authority to regulate rates that are “excessive”. We have seen over recent years that the commissioner can already deny rates that are too high, if the actuarial math does not support the amount of profit that the insurer is requesting. You may recall, after Hurricane Ida, Commissioner Donelon blocking rate filings from AllState and Farmers for over 13 months, eventually leading to Farmers withdrawing one of their Homeowners products from the state. At best HB 576 does nothing, but it could give the commissioner authority to deny rate filings, even if they are actuarially justified. He could force insurers to write insurance at a loss—we’ve seen the result of that strategy in California’s Homeowners insurance meltdown.
All that said, the IIABL legislative affairs team is working hard at the capital on your behalf. We’ll continue to push reforms that can help our market. Please be on the lookout for our grassroots advocacy alerts. Legislators want to hear from the people in their district. We need your help!
COMMISSIONER TEMPLE URGES
AS HURRICANE SEASON BEGINS LOUISIANANS TO BE INSURANCE READY
TIMTEMPLE
COMMISSIONEROF
INSURANCE
In this article, Insurance
Commissioner Tim Temple urges residents to prepare for an active hurricane season by reviewing policies, discussing out-of-pocket costs, and reporting fraud to LDI.
Insurance Commissioner Tim Temple encourages residents to prepare and Be Insurance Ready for a potentially active hurricane season this year. The National Oceanic and Atmospheric Administration has predicted an aboveaverage 2025 Atlantic hurricane season with 13 to 19 named storms, six to 10 of which are forecast to become hurricanes, including three to five major hurricanes. Hurricane season runs from June 1 to November 30.
“I urge all policyholders to Be Insurance Ready by reviewing your policies now and discussing potential out-ofpocket costs with your agent,” Commissioner Temple said. “It’s much better to know how to file a claim before your property is damaged than to try and figure out that process after the fact.
“Residents who take on property damage this hurricane season should contact their insurance company or agent first to discuss filing a claim,” Commissioner Temple said. “I also encourage Louisiana citizens to download the LDIConnect mobile app for easy access to resources like our Consumer Services department and Storm Claim Center.”
The LDI Office of Insurance Fraud urges policyholders, insurers and others to stay alert for instances of insurance and contractor fraud and to help prevent residents from falling victim to potential scammers. Commissioner Temple encourages anyone who suspects insurance fraud to report it to the LDI as soon as possible by calling 225-342-4956.
crcgroup.com
TRUST BUT VERIFY: INTEGRATING AI INTO YOUR AGENCY WHILE AVOIDING E&O CLAIMS
JAMESREDEKER SENIORUNDERWRITER
SWISSRE
This article discusses how AI is already being used in insurance agencies for tasks like accounting, chatbots, and replacing third-party vendors, improving efficiency and reducing E&O claims.
Everyone is talking about artificial intelligence (AI) in the insurance industry and the enormous changes we will be seeing in the future. However, AI is already used in insurance agencies in small ways.
Some insurance agencies have turned to AI software in their accounting departments. Off the-shelf software developed for other businesses is readily available for use in insurance agencies. We are also seeing chatbots being added to agency websites.
Some chatbots can be as simple as a pop-up that appears to be a live person offering to direct consumers to a specific page on the website. Or, more complex bots collect data provided by the visitor for application purposes. In some cases, once the bot has exhausted the website’s information, it can then transfer the visitor to a live person along with a partially completed application so that the human can complete the sale. This results in less time spent by agency employees talking to uninterested potential customers and 24-hour personal access to consumers.
However, one of the largest areas we are seeing AI adoption is as an alternative to thirdparty vendors. For the past decade, we have seen third-party vendors leasing employees from other countries to insurance agencies to handle routine tasks. These tasks do not require licensing or a personal presence within the U.S.—this is the sweet spot for using AI. There are more and more vendors coming out with insurance-related products to handle many of the same tasks these leased employees handle.
From an errors & omissions perspective, the most interesting AI products are software that review a policy to make sure it meets the expectations of what was requested in the application and what was in the binder. Many E&O claims occur when a policy exclusion or sublimit alters the coverage the agency intended to procure for its customer. This results in a claim against the agency for failing to provide the requested coverage.
E&OCLAIMS
AI can review an application and binder, checking the policy issued for language that might contradict the expectations. Then, certain policy language is flagged and provided to the agency to review to make sure the policy meets expectations.
Crucially, AI does not make the final call as to what is and is not covered. That is left to a person at the agency to determine. However, it does save countless hours of tedious work reviewing applications, binders and policy language. Furthermore, because the task is being done by AI, it can be completed in minutes as opposed to hours.
While this software is helpful in the admitted market, it pays for itself in the excess & surplus lines market, where carriers can change coverage on a daily basis and without the blessing of a state’s department of insurance. In a hard market, many admitted markets are no longer accessible and more business is being placed in the E&S market, making this a good time to adopt the use of an outside source that specializes in policy review.
Still, as great as AI is, it is only as good as the parameters set for it. Recently, an agency’s claim stemmed from a carrier in a tower of insurance that did not include defense coverage in its layer. When a claim reached that layer of the tower, the insured was forced to pay its defense, while the carrier controlled indemnity. The carrier refused to settle and forced the claim to trial. While the carrier eventually settled the claim, the situation left the insured with a seven-figure defense invoice. The insured then sued its insurance agent for failing to ensure that all of the carriers within the tower provided defense coverage.
HOW RELIABLE IS YOUR WORKERS’ COMPENSATION CARRIER?
What was the agency doing to review policies and make sure they meet expectations? They were using an AI vendor. In this claim, the root of the problem was in the contract between the AI vendor and the agency. The contract contained a list of items the AI software would review—and matching coverages in layers of a tower was not included in that list.
When implementing AI into your agency, here are three tips to avoid an E&O claim:
1 Understand the product and what it can do.
2 Test the product before purchasing it to make sure it works as promised.
3 Continue to do things the way you have always done them while you are also using the new AI product.
Overall, continue to have someone review the policies and compare their results with the results of an AI policy review product. By doing so, you can tweak the AI product until it can at least match—if not surpass—the success of your current human process. Once you have reached that level, you can potentially start discontinuing the old manual process and rely more on the AI product.
While this approach creates redundancy and extra costs for a period of time, it is a necessary step to make sure you are getting what you are paying for and reduce the chances of experiencing an AI-related E&O claim. Agencies are also encouraged to seek attorney advice to ensure the AI tool being used complies with applicable laws and regulations.
E&OCLAIMS
Jim Redeker is a Senior Underwriter, and former Claims Manager, employed by SR Corporate Solutions America Holding Corporation. Insurance products are underwritten by members of the Swiss Re group of companies (“Swiss Re”).
Please contact Jamie Newchurch or Lyra Rutledge with any questions.
This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of Swiss Re and/or its subsidiaries and/or management and/or shareholders.
SWINGING FORACAUSE IIABR’S TOPGOLF CHARITY TOURNAMENT HITS THE MARK
This year’s Independent Insurance Agents and Brokers of Baton Rouge (IIABR) TopGolf Charity Tournament was a hole-in-one kind of day! Members from across the Baton Rouge area gathered for an afternoon full of great food, drinks, and casual competition—all for a meaningful cause.
Between rounds of friendly TopGolf play, guests had the chance to connect, network, and enjoy a relaxed atmosphere with peers from the insurance industry. Free play bays added to the fun, and door prizes brought even more excitement throughout the event.
But the highlight of the day wasn’t just the swings or the socializing—it was the support raised for the Bobby Salmon Relief Fund. This fund provides financial assistance to insurance industry professionals impacted by catastrophic events—particularly those situations not fully covered by personal insurance or other resources. It’s a way for us to take care of our own when disaster strikes, and your participation made a real difference.
Thank you to the generosity of our sponsors and players! We were able to raise meaningful funds to help fellow members of the insurance community in their time of need.
The IIABR team is incredibly grateful to everyone who helped bring this event to life—from our sponsors and volunteers to every single attendee who showed up ready to give, play, and connect. Events like these remind us what makes our industry strong: not just professionalism, but the people and the heart behind it all.
We had a fantastic time and can’t wait to do it all again next year. Until then—thank you for making the 2025 TopGolf Charity Tournament such a success!
WHAT’S DRIVING THE RISE IN E&O CLAIMS? WHAT CAN YOUR AGENCY DO TO PREVENT ONE?
KATIEBUTLER PRINCIPAL AARTRIJK
This article discusses how rising Errors & Omissions claims are linked to factors like the hard market, COVID-19 aftermath, and remote work, with agencies facing increased risks and heightened vigilance..
COVID-19 hangover. The hard market. The movement of policies from the admitted market to excess & surplus lines. Whether a single factor or a combination is to blame, one thing is certain: Errors & omissions claims are on the rise, requiring independent insurance agents to be even more vigilant.
“In the last six months, we've seen a significant uptick in both the frequency and severity of E&O claims," says Amanda Juratovic, Big “I" Professional Liability assistant vice president of E&O operations. “Swiss Re is doing a deep dive into the data to try to find the correlation, but so far, there is not just one clear reason."
Elizabeth Whitney, senior vice president and head of professional liability U.S. at Swiss Re, says repercussions from COVID-19 are still flowing through the market. “Claims slowed down during COVID, but now things are catching up," she says.
David Walker, president of Hartland Insurance Agency Inc., in Hartland, Michigan, and an expert witness for agent E&O carriers, says another factor could be the impact of remote work on agency procedures and protocols. “When people are working on their own islands remotely, I think you're increasing the potential to become less focused on procedures," he says. “People might circumvent workflows because they're not around colleagues and there is not as much direct oversight."
The hard market is another factor in the increase in claims frequency, Whitney says. Coverages moving from carrier to carrier increases the likelihood of mistakes or changes in coverage not being communicated to the insured.
The hard market is also causing carriers to be both more restrictive about the terms offered and laser-focused on upholding the conditions of the policy, creating a higher probability for denying claims, Walker says. “When people sue, they aren't just going to sue the carrier," he says. “They're going to sue the agency."
“And while, ultimately, the carrier might have made the mistake, the agency must defend itself," Walker continues. “The frequency of agency E&O claims goes up because you still have to defend the claim."
RISEINCLAIMS
Another byproduct of the hard market is the increase in the number of policies being moved to the E&S market “As more business goes into surplus lines, we know there are more restrictions in coverage," says Nancy Germond, Big “I" executive director of risk management and education “And if you don't outline those changes, it's an E&O exposure "
Agents find themselves relying more heavily on E&S to reach the coverage limits that clients now need “I've been in this business more than 40 years, and I've never seen a situation where you have to build a liability tower at $5 million, but that's happening," Walker says “That increases the level of complexity in getting the coverage written "
“Internally, your agency might not have the technical skills to build those towers and make sure that everything is 'stacked' correctly, which then increases the possibility for disputes, which could then lead to E&O claims," he adds
What's Driving Agency E&O Losses?
The top causes of E&O loss have remained relatively consistent over time, according to Swiss Re, although they can be tied to current events.
Severe weather has “increased frequency and severity of natural disasters," says Karen Thurlow, vice president, professional liability claims team manager, Swiss Re. “Plaintiff attorneys are doing mass client solicitation following events like the California wildfires."
RISEINCLAIMS
“Inflation and supply-chain issues are driving up costs to replace real and personal property," Thurlow says “And increasing medical costs are impacting verdicts in personal injury cases "
Ben Albright December 2023
“Our largest claims continue to stem from commercial property fire—inadequate limits, failure to schedule a building—and personal injury from umbrella excess— failure to schedule a vehicle, failure to recognize an exclusion," Whitney says “Again, this ties to the hard market "
Here are five of the most common agency E&O pitfalls:
1) Failure to procure or give sufficient coverage Failure to procure or give sufficient coverage continues to be the No 1 loss driver, according to Juratovic One example is a commercial property experiencing a total loss, such as a fire, before it being discovered the property had been undervalued
Germond highlights the absence of flood coverage during Hurricane Helene “Agents should never say 'you don't need flood coverage because you're not in a flood zone,'" she says
“When you write the policy, don't rely on flood zones because they are notoriously inaccurate," Germond explains “Same with wildfire zones what if your insured happens to live right next to a wildfire zone? There are all types of issues with not offering these coverages "
2) Inadequate explanation of coverage details. This error can happen when an agent embellishes or misconstrues the coverage they are giving the client “A client is going to depend on an insurance agent's professionalism and follow their recommendation," Juratovic says “If the coverage isn't explained properly, it's going to be a big problem "
3) Administrative errors. Something as simple as incorrect data entry can lead to undervalued property or missed deadlines “It runs the gamut," Juratovic says “But administrative errors of any kind are the third largest driver of E&O claims."
AUTOINSURANCE
4) Failure to identify and address client exposures. If an account in Florida doesn't get wind coverage and later there is a hurricane and, subsequently, a total loss, “you didn't properly insure your client," Juratovic says.
5) Failure to communicate policy changes. Changes in coverage when a policy moves between carriers, or a piece of business moves from the admitted to the E&S market, are not always being communicated, Juratovic warns.
Agents must also be vigilant in checking for and communicating policy changes, even when the policy is being renewed with the same carrier. “Sometimes a carrier will slip in an endorsement that is actually an exclusion, and it's vaguely worded," she says. “If you see anything you don't recognize, you need to drill down and figure out what the endorsement is doing to the policy."
Agency E&O Risk Management Strategies
Walker says E&O loss drivers and causes all boil down to a relatively simple risk management formula: Communication equals avoidance and documentation equals defensibility.
“If you have open lines of communication between all three parts of the triangle—the carrier, the consumer and the agency—you'll avoid miscommunication, which is a very common cause of errors and omissions," Walker says. “Open communication is a good avoidance strategy for E&O claims."
“But can I do everything right and still potentially get sued? Yes," Walker warns. “If things go sideways and something breaks down in the communications triangle, then the question is how good my documentation is, and that will in turn determine how defensible I am in a lawsuit." E&O risk mitigation is rooted in proper procedures, Juratovic says. Here are six steps agencies can proactively implement to avoid E&O claims:
1) Procedure manuals. “The biggest gap we see, especially in smaller agencies, is not having a procedures manual," says Germond, who points out that some agencies shy away from putting their procedures in writing because it can be a double-edged sword.
“If you say, 'this is our agency's best practices' in a manual, there is a fear it could be blown up as an exhibit in court, so some agencies say they will just operate as is," Germond says. “We truly believe that is not the way to go. You should have a procedures manual."
The Big “I" offers members a downloadable procedures manual template at E&O Guardian. Agencies must update it with information specific to the carriers the agency uses.
UPCOMINGEVENTS
IIABL 2024-2025
BOARD OF DIRECTORS & OFFICERS
CHAIRMAN, BRET HUGHES
CHAIRMAN-ELECT, ROSS HENRY
SECRETARY-TREASURER, JOE KING MONTGOMERY
NATIONAL DIRECTOR, JOHNNY BECKMANN, III
PAST CHAIRMAN, ARMOND K. SCHWING
YOUNG AGENT REP, MAGGIE LANDRY
Hughes Insurance Services, Inc - Gonzales
Henry Insurance Service, Inc. - Baton Rouge
Community Financial Insurance Center, LLC - Monroe
Assured Partners - Metairie
Schwing Insurance Agency, Inc. - New Iberia
Perkins-McKenzie Insurance Agency - Baton Rouge
ANN BODKIN-SMITH
MATTHEW DEBLANC
CHRISTY DESOTO
DOMINIQUE DICARLO CROUCH
ROB W. EPPERS
MATT GRAHAM
CHRISTOPHER S. HAIK
STUART HARRIS
BEAU HEAROD
CHARLES H. LEBLANC
CRAIG MARTEL
LYDIA MCMORRIS
A. EUGENE MONTGOMERY, III
HARTWIG "ROBBY" MOSS, IV
SETH OSTENDORFF
ROBERT LOUIS PALMER, JR.
RANDY PERISE
ROBERT STONE
Thomson Smith & Leach Insurance Group - Lafayette
Continental Insurance Services - Marrero
1st Insurance of Marksville - Marksville
Riverlands Insurance Agency - LaPlace
Risk Services of Louisiana - Alexandria
Lincoln Agency - Ruston
Higginbotham Insurance - Lafayette
McClure, Bomar & Harris, LLC - Shreveport
Jeff Davis Insurance - Jennings
Bourg Insurance Agency, Inc. - Donaldsonville
Insurance Unlimited of LA, LLC - Lake Charles
Alliant Insurance Services - Baton Rouge
Community Financial Insurance Center, LLC - Monroe
