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Committee backs bill narrowing insurers' bad-faith exposure after excess judgments
Summary
The House Insurance Committee on Wednesday reported Senate Bill 111 favorably (10-3). The measure would limit when an insured (or assignee) can bring a bad-faith claim against an insurer after a jury renders a judgment exceeding policy limits, focusing on whether the insurer had a good-faith dispute over liability or medical causation.
The House Insurance Committee on Wednesday voted to report Senate Bill 111 favorably, 10-3, after a lengthy debate over insurer duties and plaintiffs’ settlement practices.
Sponsor Senator Seabaugh said the bill would codify and limit a cause of action that the Louisiana Supreme Court created in Kelly v. State Farm. “If the insurer has a good faith dispute as to liability and they lose, they're not in bad faith,” Seabaugh told the committee, adding the measure would make bad-faith claims a fact question for juries rather than a near-automatic result of an excess judgment.
The bill responds to lawsuits that,…
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