Committee defers bill that would let Louisiana motorists buy out-of-state auto policies if rates don’t drop

The House Civil Law and Procedure Committee voluntarily deferred House Bill 287 after sponsor Representative Bacalhau proposed allowing Louisiana motorists to purchase auto insurance issued under Texas, Arkansas or Mississippi law if the legislature does not achieve a 7% reduction in state auto insurance rates by July 1, 2026.

The measure’s sponsor said the plan is a market-opening backstop 'if we can’t fix the insurance crisis' and described the proposal as a one-and-a-half-year trigger: 'Nothing. What it says is if we don't do our job such that the rates in Louisiana for auto insurance don't go down by measly 7% ... then on 07/01/2026 ... Louisiana auto owners can buy their insurance policies from Texas, Arkansas, or Mississippi.' The sponsor framed the bill as a challenge to the legislature to lower rates before the out-of-state option would take effect.

Why it matters: committee members and the Department of Insurance warned the change would raise practical and legal issues, including agent licensing, whether other states would allow reciprocal sales, and the effect of applying other states’ tort laws to incidents that occur in Louisiana. Representative Carlson pointed to Texas’s dram shop rules as an example of how importing another state’s laws could change liability for in-state businesses.

What the bill would do: under the original text presented, Louisiana motorists could buy policies issued under one of the three named states’ laws after the legislative trigger date; if a claim were litigated in Louisiana, the proceedings would be governed by the law of the state that issued the policy, not Louisiana law, the sponsor said. The sponsor also said the bill contains a provision allowing local agents to sell out-of-state policies so sales would not be limited to out-of-state agencies.

Substitute and medical-cost provision: the sponsor offered a substitute he described as a separate approach that would reduce judgment amounts by calculating medical damages — when a plaintiff declines to use available health insurance — using a formula tied to federal programs: Medicare rates at 120% or Medicaid rates at 170%. The sponsor said the substitute addresses 'high medical costs' as a driver of inflated judgments. The committee chair ruled the substitute not germane to the original instrument under the committee’s germaneness rule (Section 6.12, Subsection B), which ended debate on substituting at that time.

Department of Insurance comment: Adam Patrick of the Louisiana Department of Insurance told the committee he was 'more so prepared for the substitute bill' and warned that 'there are some licensing concerns, for an agent to sell coverage in a state they have to be licensed there, so that would potentially create some issues with the original version of the bill.' Patrick said those licensing issues would be less of a problem under the substitute.

Members’ concerns: Representative Robert Dane warned the proposal could undercut local insurers and agents and questioned how out-of-state sales would be legally authorized. Representative Carlson raised the dram shop example, saying, 'Texas has dram shop laws ... We don't have those laws in Louisiana,' and asked how applying another state's rules would affect in-state businesses. Several members asked whether Texas, Arkansas or Mississippi would accept Louisiana drivers or require changes in those states’ laws.

Committee action: after extended questioning and recognition of broad member concern, the sponsor asked the chair to move to voluntarily defer HB 287. The chair asked for objection; hearing none, the committee recorded the bill as voluntarily deferred. The clerk noted stakeholders in attendance and on the preference card list, including Commissioner Tim Temple (green card, present but did not speak), Adam Patrick (white card, Department of Insurance), and representatives of State Farm and other interested parties on the red card list.

What’s next: Representative Bacalhau said he will continue work on the proposal and a substitute option; the bill will return to committee only if the sponsor or committee pursues it in a later session. No formal vote on the original or substitute language occurred because the bill was deferred by unanimous consent.

Less central details: the sponsor acknowledged staff assistance from Jen Wynne. The committee discussed internal rules — including Section 6.12, Subsection B and House rule 14.2 — while deciding germaneness. The meeting did not set a new date for further action on HB 287.