Tim Temple- Louisiana Insurance Commissioner - Deep Thoughts

Donelon never declared to run. He wanted to retire.

The BCBS deal is dead thanks to Donelon and Jeff Landry, at least until next year.

Temple is who you should support.

Your rates are high because of predatory plaintiff attorneys and recent catastrophic hurricanes.

The case in the Western District where Church Mutual was dinged heavily was because Church Mutual repeatedly screws over their insured. They handled almost all of their claims in serious bad faith. They know they should pay their insured for obvious hurricane damage but failed to do so. When you can clearly read their own claim notes which value the claim at a higher amount than what they paid they should be held accountable.

This particular insurance company mostly insures churches. And churches are not one to enter into litigation lightly. Church Mutual continues to screw over church after church. And they know it.

I don't for one second under estimate that hurricane litigation has a negative effect on rates and coverages. And I don't disagree that bogus lawsuits also have negative effects on homeowners.

But the case you mentioned is completely a situation where an insurance company failed to pay for damages they knew they had to pay. Failed to act in good faith during the CMO procedure and went to trial knowing they were going to get their arse kicked.

Now, does this case make Louisiana and undesirable state for insurance companies? Maybe. But maybe this case sends a message that Louisiana is going to make you pay if you screw over your own customer.

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But the case you mentioned is completely a situation where an insurance company failed to pay for damages they knew they had to pay. Failed to act in good faith during the CMO procedure and went to trial knowing they were going to get their arse kicked.

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This is 100% correct. They hired a third-party adjuster who recommended payments and they just ignored him without any reason. It wasn’t even a close call.

It’s frustrating to see this guy’s kind of rhetoric because we have problems. They aren’t going to get fixed by people just spouting off bullshite rather than confronting the actual problems.

The case I had in mind is Farm Bureau.

I'm guessing you calling the complaint file by the attorney the facts.

The carriers also have their issues but bad handling does not equal bath faith.

My point above is much of the bad handling can be remedied by an appraisal process which is binding.

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1-Why did Donelon suddenly decide to stop running in the middle of the election?

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My understanding is that he’s retiring. This would also answer #2.

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3-What does Temple propose about property insurance rates - which are completely unaffordable. In many instances the insurers themselves are derelict in their responsibilities after natural disasters which only makes matters worse. FWIW, my opinion of Donelon is that he’s too cozy with reinsurers, to the detriment of consumers and state chartered insurers, eg Farm Bureau/State Farm. I’m not sure what the solution is, but permitting Citizens Insurance and reinsurers to charge whatever TF they want isn’t the solution. The true problem is gargantuan reinsurers which aren’t located anywhere near Louisiana. These frickers are worse than Bog Banks. They’re the same assholes who tanked the mortgage situation in 2007. I hate Reinsurers with every fiber of my being.

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Reinsurance is a very “gentleman’s agreement” industry. In most cases, the reinsurers are bound by the underlying claims decisions even if the reinsurer would’ve handled that claim differently themselves. One of the big problems in the wake of the storms was/is really that some of the smaller fly-by-night insurance companies didn’t have enough reinsurance. The smaller ones that are successful are usually heavily reinsured to the point where they might be out of pocket $100k on a $1m claim because they just don’t have the assets to self-fund catastrophe situations. A good chunk of the ones that went bankrupt got huge books with little reinsurance and hit insolvency extremely fast.

We actually could’ve avoided a lot of these issues by regulating a lot of these companies similar to how a bank checks a loan. If someone doesn’t have a personal assets on hand, the bank is generally going to require security on a big loan. The same concept should’ve applied to these smaller insurers where they should’ve had reinsurance requirement thresholds based on their assets and book values. I think we’ll see some of this develop over the next few years.

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4-I see that Temple is proposing legislative reforms and a special session to address the problem. Does anyone know what his specific suggestions may be?

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I don’t know what Temple personally has proposed, but I know the last couple bills that went to the floor were largely centered on gutting the bad faith statutes with a few other changes.

[quote]5-does anyone in the insurance industry know whether it would be possible to solve the problem with some kind of charter with other states who are also prone to hurricanes in order to spread the risk pool that these

That’s kind of how reinsurance works. At a basic level, the main distinctions are specific or pool and excess of loss or co-insured. A reinsurance policy could be a combination of those categories (i.e., pool XOL or pool co-insured). Specific would be a policy covering an identified location while pool would be something like all properties in Louisiana (there’s a lot of ways to tailor these). They could also do all properties in multiple states. As for XOL v co-insurance, XOL is a policy where the reinsurer pays nothing until payments hit a threshold while co-insured would be they pay a percentage of the loss. A lot of times these are blended, or “layered.” As an example of layering, there could be no reinsurance for first 100k, then a 50% coinsurance up to $1m, and then fully reinsured XOL after $1m. In that example, the maximum liability of the primary insurer is $550k.

For a broader example and more to your point, let’s say an insurer has a $1b property book across SE US, $400m is in Florida, $200m is in LA, and they have two particular locations in La that are each worth $50m. They could have a layer were once their payments across their entire $1b book hit $500m, they are fully reinsured on XOL (Pool XOL). They could have another policy (layer) where once their Florida and LA combined payments hit $300m, they are reinsured with coinsurance covering 80% of the exposure after that (Pool blended XOL/coins). From there, they could have specific insurance that pays 50% of the first $25m on the big LA buildings (specific coins) and then another layer that fully reinsures them on those buildings after $25m (specific XOL). So, you can spread your risk a ton through reinsurance. It can get more complicated than this and even goes back further where reinsurers have their own reinsurance.

So, to your point, I don’t think it requires a charter because they can already do this in private transactions. A lot of it comes down to business planning and making sure you have enough assets to satisfy claims that are not reinsured.

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This is laughable. They are representing the insured instead of using a public adjuster. But all intent and purposes are doing the same function of a public adjuster.

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Just wrong. An attorney does not make an estimate of loss. A public adjuster or contractor does. Again, if you have evidence of an attorney, that is neither a licensed contractor or public adjuster, creating estimates of damage and making claims for those amounts, you should file a complaint. But, this isn’t how it works.

His dad was Aubrey Temple one of the founders of Amerisafe in DeRidder and founding Chairman of the board of LWCC. Tim has been on the other side of insurance (not consumer) his whole life and has known wealth his whole life because of it.

Tim is going to be another Comissioner FOR insurance. Not OF insurance. Huge difference

Need more info to tell if you have your facts straight on theFab claim.

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You're just being obtuse now. They do hire/ contract a 3rd party to create an estimate which is almost always over scoped and inflated which they send/ represent to the insurer.

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So, it's not attorneys acting as public adjusters like you previously said. You now pivot to attorneys hiring public adjusters which is a commonplace practice for both insureds and insurance companies. Yet somehow, I'm obtuse for pointing out that you're wrong for saying attorneys are acting as public adjusters (which your recent post seemingly acknowledges that you were wrong).

You do realize insurance companies hire third party adjusters? Why are their adjuster reports not under-scoped? Surely, you approach their scopes with the same skepticism since both plaintiffs and insurers have polar monetary incentives (one wants a bigger claim to make more and one wants a smaller claim to pay less).

Also, to your other solution about binding appraisals. The legislature added it to the bad-faith statute sometime after Laura/Delta. It allows a stay of litigation while the appraisal is processed even if lawsuit was filed prior to the insurers invocation of appraisal. The insurers rarely use it because the third-party appraisals generally come in higher than their numbers. Looks like you'll need to get back to the drawing board.

I'm also not saying there isn't abuse because there absolutely is. But, it is "obtuse" to act like it is the only problem with our insurance industry. Unfortunately, everyone wants a boogeyman nowadays rather than trying to approach the real situation. The result is we get stuck with rhetoric like yours instead of constructive dialogue about changes that could turn it around.

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My point above is much of the bad handling can be remedied by an appraisal process which is binding.

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100% Agree.
Is it something the Commish can do or would it have to go through Legislature? I am not sure even in our supposed Conservative majority that this could get through.

It is worth exploring to prevent some of these crazy lawsuits.

Yes, I am in the field, and I have seen ridiculous payouts for something that could have simply gone thru appraisal and be much more reasonable for all parties.