Technical Advisory #358
June 5, 2024
2024 Act 9 HB 611 – More Than 3-Year Rule
TA #358
2024 Act 9 HB 611 – More Than 3-Year Rule
June 5, 2024
Since 1992, R.S. 22:1265.D. has been commonly referred to as the “more than 3-year rule” which prohibits insurance companies from cancelling or nonrenewing Homeowners insurance policies that have been written for more than 3-years except for very limited exceptions.
Louisiana is the only place in the world that had such a limitation on insurance companies. This restriction has discouraged insurers from doing business in Louisiana. In order to attract new insurance market capacity to Louisiana, legislation was introduced to provide insurance companies with some flexibility on how this law applies.
Act 9 HB 611 of the 2024 Regular Session of the Louisiana Legislature amends this statute to provide some flexibility for insurance companies to manage their Homeowners book of business.
Act 9 sunsets the “more than 3-year rule” effective August 1, 2024. Policies that have been in effect for more than 3-years and are therefore protected by the rule on or before August 1, 2024, will continue to be protected, but R.S. 22:1265.D. will not apply to any existing policies in effect for less than 3-years and new policies written after that date.
Currently, R.S. 22:1265.D. does not allow insurers to change the deductible or modify coverages on individual policies. After January 1, 2025, Act 9 will allow insurance companies to increase deductibles or modify coverages on individual policies protected by the more than 3-year rule.
After August 1, 2024, insurance companies may file a plan with the commissioner of insurance to nonrenew up to 5% of their policies that are protected by the “more than 3-year rule.” The bill authorizes the commissioner to promulgate rules, and Commissioner Temple has indicated that he will issue a rule that will limit nonrenewals to 5% of the policies in each parish to prevent a large number of nonrenewals in any specific geographic area of the state.
Distribute this Technical Advisory to all agency staff who deal with Homeowners policies and possible nonrenewals and cancellations.
The information provided by IIABL is intended for educational and informational purposes only. IIABL does not make any warranty or representation, express or implied, with respect to the accuracy, completeness or usefulness of the information provided. Information provided represents the views of one or more experienced insurance professionals and is not a recommendation that a particular course of action be followed. Please note that this information is not legal advice upon which you should rely. Please seek any legal opinion you may need from a qualified attorney. IIABL is not liable for any liability or damage which may result from the use of this information.