The proposed legislation, known as the "Stated Value Policy Act," aims to establish a framework for insurers of residential properties in Louisiana to offer stated value policies. This new policy option allows homeowners to declare a specific value for their property, which will be agreed upon by the insurer, rather than relying solely on the current market value. Insurers are required to disclose the availability of stated value policies in all relevant documentation and must adhere to certain requirements when homeowners opt for these policies, including the submission of a written payoff statement and a mortgage certificate.

Additionally, the Act sets forth minimum policy value standards, mandating that insurers cannot issue a stated value policy for less than the outstanding mortgage balance on the property. The commissioner of insurance is tasked with providing consumers with clear information regarding the risks and limitations associated with stated value policies, including comparisons to other types of insurance. The legislation also includes provisions for enforcement, penalties for non-compliance, and a severability clause to ensure that if any part of the Act is deemed invalid, the remainder remains effective. The Act will take effect upon the governor's signature or after the designated period for bills to become law without signature.