Louisiana Issues Directive Clarifying Position on Property Insurance Rates

On March 22, 2019, the Louisiana Department of Insurance (“LDI”) issued Directive 215 clarifying its position on La. R.S. § 22:1460(I)(1)(c), which prohibits the grouping of higher classified public fire protection areas with lower classified public fire protection areas in order to determine fire insurance rates.

Directive 215 specifies that insurers shall not apply the same premium or use the same factor to calculate premiums for any two fire protection areas. The Directive goes on to state that all insurers authorized to write fire insurance, including fire and allied lines for personal or commercial property and homeowners’ insurance policies, must adhere to La. R.S. § 22:1460(I)(1)(c) and comply with the rates and rules of the Property Insurance Association of Louisiana (“PIAL”), subject to certain exceptions under La. R.S. § 22:1468.

The LDI mandates that insurers authorized to write fire and allied lines or homeowners’ insurance review their rate manuals and rules currently in place to ensure compliance with Directive 215 and La. R.S. § 22:1460(I)(1)(c). Any insurer not in compliance with the new regulations must file with the LDI updated rates by August 1, 2019 to be effective on or before January 1, 2020.

For questions regarding Directive 215 and La. R.S. § 22:1460(I)(1)(c), or for assistance in any rate filing matters, please contact Westmont Associates, Inc.