Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Marcell Exception topic
No spam. Unsubscribe anytime.
Committee approves bill to clarify Marcell exception for oilfield insurance
Summary
The committee reported HB 941 favorably after months of stakeholder negotiations to codify the Marcell exception and reduce ambiguity in oilfield additional-insured policies, with industry groups and operators supporting the measure.
The Senate Insurance Committee reported House Bill 941 favorably on April 22 after proponents from the oil and gas sector described months of collaboration to clarify the Marcell exception in the Louisiana Oilfield Anti-Indemnity Act.
Representative Abare explained the bill's goal to modify the statutory carve-out known as the Marcell exception, bringing clarity to when a party may be an additional insured without violating anti-indemnity provisions. "By codifying the Marcell into statute, we basically create a roadmap that when one party wishes to be insured under another party's liability insurance, it is done without violating the Indemnity Act," Abare said.
Industry witnesses told the committee the text is the product of months of negotiation among operators, contractors, brokers and underwriters. Mike Montal of the Louisiana Oil and Gas Association said the group included lawyers, operators and contractors and that the result reflects broad stakeholder input. Anita Wolverton of Expand Energy described practical fixes the bill would make, including clearer notification responsibilities and deductible allocation rules.
Wolverton said the bill will streamline administrative burdens for operators that frequently purchase policies mid-cycle: "This legislation provides certainty in three key areas: notification responsibilities, group coverage definition, and deductible allocation," she said.
Committee members asked clarifying questions about who would be notified and how deductibles would be assigned; proponents said the bill includes procedures for notice and specifies a first-dollar deductible allocation threshold ($100,000 to the policy purchaser) with the remainder assigned to the primary insured.
On motion, the committee reported HB 941 favorably as amended.
Ending: The bill moves forward with the committee finding broad stakeholder support; proponents said the change should reduce litigation and administrative uncertainty for oilfield contracting relationships.
