The American Insurance Association is opposing recent legislation passed by the Louisiana Senate Insurance Committee, calling it "very destructive" to the state if it becomes law.
"Senate Bill 707 is a very expansive bad faith measure that would allow third party claimants the right to sue insurance carriers," said John Marlow, assistant vice president, AIA Southwest Region. "Only a handful of states allow third-party, bad-faith suits against insurers, all of which have seen a negative impact on insurance liability costs and premiums as a result.
"Third party bad faith doctrines encourage fraud and the filing of marginal and inflated claims. In the context of claims against business defendants, [this] could have a debilitating impact on liability insurance consumers, jobs, and the overall economy," Marlow explained.
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