If Republican Gov. Jeff Landry isn’t careful, the insurance reform train is going to leave the station without him, imperiling his reelection chances.
Over the next few months at the behest of GOP legislative leaders, committees plan to meet to hash out options for tort reform. Louisiana vehicle insurance rates are close to the top of all states, and it has a legal structure surrounding the processing of claims out of step with states that tend to have significantly lower rates.
That relative ranking hasn’t changed much since some lukewarm reforms were enacted in 2020 over the objections of Democrat former Gov. John Bel Edwards. Important to note, a number of exogenous factors unrelated to policy choices significantly affect rates, such as weather, and others only indirectly related, such as criminal activity, also can matter, as well as national policy decisions that the state cannot affect, such as economic policy that impacts price inflation. And, as court cases can drag on for years, it will be some time before the true impact of change will be experienced.
Regardless, lawmakers have zeroed in on changing statutes to bring the state more in line with others on this issue. Some of that was accomplished in this year’s session, but a few helpful measures stalled in Senate committee or on the floor, and perhaps the highest profile of all, HB 423 that would have increased transparency in medical expenses for use in deciding awards which otherwise favors plaintiffs, was vetoed by Landry, who in his message cited the same objections as have tort reform opponents, with a particularly mistaken reference to rate changes that didn’t factor out all the exogenous sources impinging on rates.
This move increasingly cast suspicion on Landry as siding with trial lawyers, the major beneficiaries of the current legal regime, on the issue. Much has been made about hefty campaign contributions from that sector to him and how that may signal his views on reform. Besides his open defiance on HB 423, Landry operated behind the scenes that may have influenced short-circuiting other reform bills.
That doesn’t seem to faze most in the GOP as they press ahead with hearings that can serve as a means of building political support for tort reform. The problem they face is a few dissenters within their ranks that can prevent them from reaching two-thirds majorities to override any possible vetoes, as almost always all legislative Democrats have opposed these measures.
But they do have leverage over Landry. He has scored early agenda wins on restoring balance to the criminal justice process and on low-hanging social issues, but major issues of residential and commercial insurance rates and fiscal reform remain as yet unaddressed. Changing the inefficient latter in a meaningful way will require altering the Constitution that requires legislative supermajorities, which Republican legislators favor but haven’t yet acted upon, begging off in the interests of time.
Voters will remain unhappy at higher rates and this could be used as fodder against Landry for another term although perhaps trial lawyer support could help to mitigate this. However, if Landry also fails to deliver on fiscal reform, this might cause more erosion of support. Thus, GOP legislators could engage in transactional politics with Landry, promising him fiscal reform if he won’t stand in the way of tort reform. It might make trial lawyers unhappy, but voters would respond positively to reforms that credibly promise in the future both an anchor on rate increases and lower taxes and better spending choices by government, creating unimpeachable reelection support for him even if trial lawyers tried to recruit a challenger.
If Landry builds a legacy right, he can dispense with that source of special interest electoral support if that’s all it is to him. Assuming conservative legislative majorities keep their resolve, it’s time for him to lead or get out of the way of tort reform, or else eventually possibly getting run over by it.
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