Louisiana receives F for insurance
Louisiana recently received an F for its insurance market from R Street Institute, a free market group. It’s 2017 Insurance Regulation Report Card looked at the regulatory structures in each state.
As a whole, according to the report, most states have insurance markets that aren’t overly concentrated, and insolvencies are rare. Most also have guaranty fund protections.
Louisiana, however, scored an F in 2017–a step down from the D it had in 2016. Louisiana also ranked 48th in the nation for its insurance market.
Surrounding state 2017 grades: B-minus for Texas, rank 27; D for Mississippi, rank 41; and B-minus for Arkansas, rank 29.
Louisiana was also noted for being only one of three states with auto insurance markets that would be considered moderately concentrated.
According to the report, for markets to serve consumers well, there must be a variety of competitors with products designed to fit different budgets and needs.
Also, Florida and Louisiana sponsor state-run insurance companies that serve both the coastal and Fair Access to Insurance Requirement plans.
Former state Insurance Commissioner Jim Brown commented on the report in his personal blog, saying the Louisiana Legislature is directly to blame for the state low ranking.
In its state-by-state developments, the report cited nothing for Louisiana in the year 2017. Louisiana was, however, noted for being one of the states with politicization, meaning it has an elected insurance commissioner.
“For this reason, we downgrade those states where insurance regulation is explicitly a political mater, and acknowledge the wisdom of republican structures that properly insulate insurance regulators from the fickle winds of politics,” note R.J. Lehmann, author of the report.
Insurance problems are nothing new for Louisiana. It is a shame that our state continues to wallow at or near the bottom of this list.