Jim Beam column: State has new commissioner

Published 6:54 am Saturday, August 19, 2023

Tim Temple, insurance commissioner-elect, got the job he wanted and apparently realizes he’s taking on an extremely tough challenge.

“Louisiana is facing a crisis as bad as it’s been in my lifetime,” Temple said when he qualified. Whether insurance policyholders will agree with him that the industry is over-regulated remains to be seen.

The state needs to be a place where companies want to write insurance business, Temple told The Shreveport Times.

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Temple, a Republican, has spent 20 years in the insurance business and that should help but it won’t be easy. He will replace Jim Donelon who has held the commissioner’s job since 2006.

Rich Weaver was running against Temple in the Oct. 14 primary, but he dropped out of the race. The Advocate reported that Weaver said Temple was planning to try to disqualify him by saying Weaver did not meet a state residency requirement and hadn’t paid his taxes.

“None of it is factual,”  Weaver said. “But I don’t have the funds to defend it.”

Weaver is a medical malpractice adjuster and the newspaper said he faced overwhelming odds against Temple. He qualified to run as a Democrat and was a political unknown. He had never sought office before and didn’t  raise any money.

Temple loaned his campaign $2 million, which is what he spent when he lost to Donelon in 2019. Donelon won the 2019 primary with 53% of the vote to 47% for Temple.

Donelon became acting commissioner when Robert Wooley resigned Feb. 15, 2006, to take a private sector job. Donelon then won a Sept. 30, 2006, special election.

OK, what are the problems Temple faces?

Home and business owners are having problems finding coverage because of the state’s 2020 and 2021 hurricanes. Those who can find it realize it’s expensive, particularly for those who live along the coast.

Nine property insurance companies doing business in the state went insolvent. Five were based in Florida, which has insurance problems similar to Louisiana’s.

Louisiana auto and truck insurance rates are among the highest in the country. The national annual average for car insurance is $2,014 per year for full coverage, according to bankrate.com.

Florida had the highest 2023 full rate at $3,183 followed by New York, $3,139; Louisiana, $2,909; Nevada, $2,779; and Michigan, $2,691. My full rate for the year ending Sept. 20, 2023, was $2,166. It will be $2,784 for the next year.

The Advocate said the Legislature in 2020 passed a measure making it harder for people injured in wrecks to sue. The goal was to reduce car insurance rates, but the newspaper said they continued to climb.

Donelon has insisted that high auto claims awards against insurance companies by Louisiana courts is a big factor keeping rates relatively high. “Our claims-to-litigation ratio since I was chairing the Health Insurance Committee in the ’90s has been the highest in America,” he said.

The national average cost of homeowners insurance is $1,428 per year for $250,000 dwelling coverage. The same coverage in Louisiana would cost $1,992, according to bankrate.com.

The website said Louisiana’s coastal position puts it at risk for widespread hurricane damage. Hurricane Katrina was the costliest hurricane in U.S. history and caused devastating damage to New Orleans and surrounding areas. Tornadoes are also common in the state, with 50 reported in 2021.

Oklahoma had the highest annual homeowner rate at $3,659. It is followed by Kansas, $3,083; Nebraska, $2,951; Colorado, $2,152; Arkansas, $2,123; South Dakota, $2,105; Kentucky, $2,009; Louisiana, $1,992; Florida, $1,981; and Texas, $1,967. My premium for the next year is $2,761.

Temple said he wants to make it easier for insurance companies to set their homeowner rates. He believes that would free the industry and encourage more companies to enter Louisiana’s market.

“We have to create a marketplace in Louisiana so that companies want to come back,” Temple said during the campaign. “When they compete, that’s when you see premiums come down.”

Louisiana is the only state in the country that prevents an insurer from dropping a homeowner who has been with that insurer for the previous three years, according to The Advocate. It’s a Donelon policy. The newspaper said a key issue for Temple is whether he will support lawmakers who want to scrap the policy.

The high cost of insurance in Louisiana has been a sore spot with motorists and homeowners for many years. Making policyholders feel better about insurance rates will be Temple’s toughest challenge.

Let’s hope he’s right about better days ahead because insurance reform is long overdue.