Louisiana Department of Insurance
MONTHLY REPORT
Volume 12, Issue 10
October 2012


Members

Commissioner Jim Donelon
Theodore "Ted" Haik, Jr., Chair
Jeff Albright, Vice Chair

Raymond J. Aleman, Sr.
Lee Ann Alexander
J.E. Brignac, Jr.
Paul Buffone
Stephen F. Campbell
Anne Cassity
Sheriff Greg Champagne
Representative Greg Cromer

Manuel DePascual
Michael Guy
Lance "Wes" Hataway
Senator Eric LaFleur
Scott Landry
LTC John A. LeBlanc
Ann Metrailer
Robert Moorman
Senator Dan "Blade" Morrish
Chris Roy, Jr.
Representative Kirk Talbot
Earl Taylor


Staff


Terrell B. Moss, Director

David Evans,
Supervisor/Research Analyst

Katie Walsh, Administrative Assist./Research Analyst

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kwalsh@ldi.la.gov

2012 Conference on Insurance Fraud and Vehicle Theft

The Louisiana Department of Insurance (LDI), along with the Louisiana Automobile Theft and Insurance Fraud Prevention Authority (LATIFPA), will host their biennial Conference on Insurance Fraud and Vehicle Theft on Wednesday, October 17 in Baton Rouge.  The conference will bring together industry experts and officials on both a local and national level who will discuss current trends, techniques and technological advances used in the prevention of insurance fraud and vehicle theft.

Commissioner Jim Donelon will deliver opening and closing remarks at the conference.   The event will include presentations on new and innovative communication and interview techniques for use when conducting a fraud investigation, as well as discussions regarding the cooperative effort between insurance companies, crime prevention organizations and law enforcement officials when investigating insurance fraud and vehicle theft.  Other topics to be presented include the impact that social media has on fraud, prosecution of insurance fraud, and overviews of health insurance fraud, catastrophe fraud and vehicle theft and fraud insurance claims.

Notable speakers include President and Chief Executive Officer of the National Insurance Crime Bureau (NICB) Joseph H. Wehrle, Insurance Fraud Chief Thomas McCormick with the Criminal Division of the Department of Justice, East Baton Rouge Parish District Attorney Hillar C. Moore and 19th Judicial District Criminal District Judge Anthony J. Marabella, Jr.

“Louisiana is actively engaged in the prevention of insurance fraud and vehicle theft,” said Commissioner Donelon. “By participating in anti-fraud legislation, public awareness campaigns and supporting the use of bait cars, license plate readers and educational outreaches such as this conference, LDI and LATIFPA continue to diligently work towards reducing fraudulent claims and vehicle theft in Louisiana.”

It is not too late to register online for the Conference on Insurance Fraud and Vehicle Theft!    

To register for the conference, visit the Department of Insurance website: www.ldi.la.gov under the “Events” tab.


LPCIC Meeting

The Louisiana Property and Casualty Insurance Commission (LPCIC) recently held a meeting at the Louisiana Department of Insurance, Poydras Building.

Chairman Ted Haik acknowledged that two new positions were added to the Commission as a result of Act 317 passed in the Legislative Session- a representative from LA Surplus Line Association (Mr. Scott Landry) and the Deputy Commissioner of Consumer Advocacy, LDI.  Several new members joined the LPCIC due to previous resignations from the Commission- Mr. J.E. Brignac (LAFAC, Inc. representative), Ms. Anne Cassity (Governor’s designee) and Mr. Steve Campbell (LA Department of Public Safety, Commissioner of OMV).

Mr. John Fleming, III, CEO of Fleming and Hall (an outsource claims service) spoke to commission members about the current claim environment in Florida.  He detailed how legislative changes enacted after 2004’s active hurricane season and Florida Citizens’ emergence as the insurer of first resort have impacted the market.  Following the four hurricanes that struck Florida in 2004, legislation was passed that required initial claim payments to be made at replacement cost rather than actual cash value.  This appears to have led to an increase in public adjusters followed by an increase in mold and then sinkhole claims, which has resulted in significantly higher loss ratios.  While the average homeowner policy premium is lower in Florida than in Louisiana, claim frequency and payout in Florida is significantly higher than in Louisiana.  Florida Citizens writes about 25 percent of the homeowners market and has been struggling with depopulation.

Mr. John Wells, Director of Operations, Louisiana Insurance Guaranty Association (LIGA) spoke how LIGA fulfills its purpose as the last step of policyholder protection when an admitted insurer has been judged insolvent.  He explained the make-up of the board, recent history, funding, minimum and maximum limits, and emerging issues on the state, national and international levels. 

Mr. Richard Robertson, CEO of LA Citizens Property Insurance Corporation (Citizens) gave an update on the current state of Citizens. He reported that Citizens continues to be very successful with their depopulation program, and keeping those depopulated policies out of Citizens.  He spoke about the recent class action lawsuits against Citizens (the Oubre, Orrill and Thibodeaux cases).  Citizens’ wind and hail only policies have increased in number by about 10 percent since the beginning of the year which has raised issues that are being addressed. Mr. Robertson reported that Citizens’ reinsurance program is very strong and will offer sufficient coverage. 

Mr. Ed O’Brien, Deputy Commissioner- Office of Property and Casualty at LDI reported on 2012 legislation, including:

Act 512- gives law enforcement the authority to impound a vehicle if the driver does not have proof of insurance. 
Act 221- provides for deductible reimbursement by uninsured motorists. 
Act 824- allows electronic display of proof of insurance, allowing drivers to carry a copy of their insurance identification card on their smart phone. 
Act 271, Act 311, Act 368, Act 419 and Act 749 were also discussed.

Meeting Notice:  The Louisiana Property and Casualty Insurance Commission will hold its next meeting on Wednesday, November 14th at 1:30 p.m. at the Poydras Building.

Recovering from Hurricane Isaac

When Hurricane Isaac made landfall in Port Fourchon, LA the morning of August 29th, the Category 1 storm proved to be an extremely slow-moving rain event that affected much of Southeastern Louisiana, especially in St. John the Baptist Parish and the Braithwaite area on the east bank of Plaquemines Parish.  The Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) has reported that nearly 59,000 homes throughout the state were damaged during the storm. 

LDI staff members have been active in communities impacted by the hurricane, making presentations, offering insurance information and answering questions. Along with representatives from FEMA and other local officials, LDI staff participated in community meetings in Laplace and Violet to assist residents in St. John and St. Bernard Parishes who sustained damage from Isaac. LDI has conducted similar community outreaches in Hammond, Marrero, Luling, New Sarpy, New Orleans and Baton Rouge, among other locations.

Staff members are informing policyholders who feel they have not been fairly compensated for their insurance claims to contact the LDI. Policyholders can also file a complaint in writing with LDI online by clicking on “File an Insurance Complaint” under our “Consumer” section.

Information on the National Flood Insurance Program (NFIP) can be accessed via their website, www.floodsmart.gov

Teen Drivers Influenced by Parents’ Driving Habits

A recent study, conducted by Liberty Mutual and SADD (Students Against Destructive Decisions), surveyed 1700 high-school juniors and seniors and the findings determined that parents’ driving habits do, in fact, influence their teens’ driving habits.  Categories of the risky behavior ranged from texting while driving to driving under the influence of drugs or alcohol.  The different behaviors are detailed in the chart below, followed by the number of parents who display the behavior, then teens who self-reportedly participate in the same behavior.

About two-thirds (66 percent) of teens surveyed believe that their parents participate in risky or dangerous driving habits. 

Driving Behavior

Parental (observed by teens)

Teens (self-reported)

Talking on cell phone

91%

90%

Speeding

88%

94%

Texting

59P

78%

Driving without seat belt

47%

33%

DUI - alcohol

20%

15%

Driving under influence of marijuana

7%

16%