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Committee clears bill letting insurance department retain small surplus to fund anti-fraud investigations
Summary
House Bill 401 would let the Department of Insurance keep unspent assessed fees rather than returning excess directly to carriers; Department and law-enforcement witnesses said retained funds will fuel fraud investigations and enforcement.
House Bill 401, carried by Representative K. Dickerson and requested by the Louisiana Department of Insurance (LDI), was reported favorably by the House Insurance Committee after testimony from LDI officials and law enforcement about rising insurance-fraud referrals.
Representative Dickerson said the bill would allow the Department of Insurance to retain otherwise refundable assessed fee surplus to fund the department’s insurance fraud task force and other investigative activities. Nathan Streetbeck of the Department testified that national insurance-fraud losses exceed $300 billion annually and the department had roughly 3,700 referrals last year (compared with roughly 1,000 annually historically). LDI said the last two fiscal years produced roughly $2 million each year in excess funds that otherwise would have been returned to industry if not appropriated.
Department counsel told the committee current statute limits the commissioner’s ability to assess subsequent years when a surplus exists; HB 401 would permit LDI to retain the surplus for anti‑fraud efforts so the agency can investigate and prosecute more cases and maintain steady staffing.
Representative Jordan asked about the fee/tax distinction; LDI staff said industry representatives have told the department they would prefer the department be allowed to retain funds if used for fraud enforcement. Representative Dickerson said the bill aims to reduce fraud-driven premium increases by bolstering enforcement.
The committee adopted the bill and reported it favorably without recorded opposition. Supporters said retained funding would help keep premiums down by reducing fraudulent claims; critics urged continued oversight and clarity about assessments and constitutionality. The bill will go forward to the House floor.
