Louisiana Governor Vetoes Invoice Meant to Restrict Dangerous Religion Lawsuits Towards Insurers
On June 16, 2025, Louisiana Governor Jeff Landry vetoed Senate Invoice 111 (SB 111), a measure designed to curb dangerous religion lawsuits in opposition to insurance coverage corporations, sparking debate over the state’s ongoing insurance coverage disaster. The invoice, sponsored by Senator Alan Seabaugh, aimed to limit policyholders’ potential to file dangerous religion claims by barring such lawsuits in instances involving good religion disputes over legal responsibility or medical causation, or when insurers weren’t given no less than 30 days to answer settlement gives or full discovery. The time period “enough discovery” was left undefined, elevating considerations about its utility.
In his veto message, Landry argued that SB 111 would undermine current dangerous religion statutes, which he mentioned are crucial for discouraging delays in claims processing. He emphasised that the invoice might make it tougher for policyholders to problem wrongful declare denials, doubtlessly rising uncertainty within the authorized course of. “If the legislature wish to make cheap modifications to the dangerous religion statute subsequent yr, I’ll gladly work with them,” Landry acknowledged, signaling openness to future reforms however rejecting this particular strategy.
The veto has drawn sharp criticism from proponents of tort reform, together with Seabaugh, who expressed frustration, feeling “blindsided” by Landry’s resolution after believing he had the governor’s help. Seabaugh and others, just like the Louisiana Affiliation of Enterprise and Business, argued that SB 111 would have addressed the state’s litigation-heavy atmosphere, which they declare drives up insurance coverage prices. Posts on X echoed this sentiment, with customers like @TruckinginLA and @LAFirstStandard accusing Landry of breaking a promise to signal all tort reform payments, suggesting ties to trial attorneys influenced the veto.
Conversely, critics of SB 111, together with policyholder advocates, argue it might have shielded insurers from accountability, permitting them to disclaim claims or delay settlements with out ample recourse for customers. Louisiana’s dangerous religion statutes, La. R.S. 22:1892 and 22:1973, impose penalties—comparable to 50% of the declare quantity or $1,000, plus legal professional charges—for insurers’ arbitrary or capricious failure to settle claims promptly. Current amendments through Senate Invoice 323 (Act No. 3), signed by Landry on Might 7, 2024, launched a 60-day “treatment interval” for insurers to resolve claims and keep away from penalties, balancing shopper protections with {industry} wants.
Louisiana’s insurance coverage market stays strained, with excessive premiums and insurer withdrawals following catastrophic hurricanes. Whereas Landry has signed different tort reform measures, comparable to Home Invoice 450 ending the Housley presumption and Home Invoice 315 extending the tort declare prescriptive interval to 2 years, the veto of SB 111 highlights tensions between shopper protections and industry-friendly reforms. Insurance coverage Commissioner Tim Temple referred to as the veto “discouraging,” reflecting {industry} hopes for decreased litigation.
The veto leaves Louisiana in a “wait-and-see” mode, with stakeholders watching whether or not future reforms can handle skyrocketing insurance coverage charges whereas safeguarding policyholders’ rights.
By State Coverage Correspondent
Printed: June 17, 2025
