RÉSUMÉ DIGEST
ACT 591 (SB 212) 2022 Regular Session Stine
New law establishes the "Hurricane Mediation Program" (program).
New law provides every insured may request mediation for an insurance claim for residential
property damages that involve disputed amounts up to $150,000 if the governor declares a
state of emergency for a named windstorm event, and the property insurance claim arises out
of a state of emergency on property damaged that is located in this state and the property is
in the geographic area that the named storm or windstorm is the subject of the declared state
of emergency.
New law provides that if the insured decides to mediate the disputed amount, the insured is
required to contact one of the participating mediation firms that is listed on the department
of insurance's (department) website.
New law allows an insured and insurer to agree to mediate and subject to the provisions of
new law any claim for residential property damages that involve disputed amounts in excess
of $150,000 and the property is located within the geographic area that is subject to the
declared state of emergency.
New law requires a mediation firm (firm) that elects to participate in this program to comply
with all of the following:
(1) The firm contacts the department regarding participation in the program.
(2) The firm agrees to the terms and conditions set forth in new law.
(3) The firm provides the department its name, contact, municipal address, electronic
mail address, and telephone number.
(4) Requires the mediation cost be reasonable.
(5) Requires the firm to notify the insurer and the insured within five business days after
receiving the assignment, and requires the firm to notify the insurer and the insured
in writing of the assignment to mediating the disputed property insurance claim.
(6) Requires the mediation firm to set the matter for mediation to occur within 30 days
of assignment.
(7) Requires that the firm is in charge of the mediation and to establish and describe the
procedures to be followed. Requires the mediation firm to conduct the mediation in
accordance with the standards of professional conduct for mediation adopted by the
American Bar Association.
(8) The firm may meet with the insurer and insured separately to encourage meaningful
communications and negotiations, and otherwise assist the insurer or insured to arrive
at a settlement.
(9) Requires in-person mediation be conducted statewide in a metropolitan statistical
area at an office or business location that is selected by the mediation firms. The
insurer or the insured is not charged for the use of venue. If the insurer or the insured
prefer to participate in the mediation remotely via telephone, video conference, or
other similar electronic means, it is permitted provided the mediator and all other
parties to the mediation are notified of the preference in advance of the mediation,
and as needed to accommodate remote participation.
(10) The mediation session may last up to 90 minutes of actual mediation with the insurer
and the insured. The ninety minutes shall not include time spent on telephone calls,
document review, research, or any other administrative tasks that the mediator may
find necessary to prepare for the mediation.
New law requires the department to maintain a list of participating firms and post it on the
department's website that includes the firm's name, contact, municipal address, electronic
mail address, and telephone number.
New law requires the insurer and the insured comply with all of the following:
(1) Requires the insurer to pay all of the cost of conducting mediation conferences,
except if an insured fails to appear at the mediation conference, requires the
mediation conference to be rescheduled upon the insured's payment of the costs of
a rescheduled conference.
(2) If the insurer fails to appear at the mediation conference, requires the insurer to pay
the insured's actual cash expenses up to $250 incurred in attending the conference
and requires the insurer to pay an additional fee to reschedule the mediation
conference necessitated by the insurer's failure to appear and subjects the insurer to
unfair trade practice laws if the insurer's failure to attend was not due to a good cause.
(3) An insurer is considered to have failed to appear if the insurer's representative lacks
settlement authority. Requires the insurer to pay up to $250 incurred in attending the
conference and requires the insurer to pay an additional fee to reschedule the
mediation conference necessitated by the insurer's failure to appear and subjects the
insurer to unfair trade practice laws if the insurer's failure to attend was not due to a
good cause.
(4) Requires the insurer provide the firm all of the following:
(a) Name, municipal address, electronic mail address, and telephone number of
the insured and the location of the property if different from the address
given.
(b) The claim and policy number for the insured.
(c) A brief description of the nature of the dispute.
(d) The name of the insurer and the name, municipal address, electronic mail
address, and telephone number of the insurer's contact for scheduling
mediation.
(e) Information with respect to any other policies of insurance that may provide
coverage of the insured property for named perils like a flood or windstorm.
(5) When the insurer and the insured have been contacted by the firm, within five
business days after being contacted, requires the insurer and the insured to provide
the firm all relevant written documentation regarding the disputed claim and a short
statement from each side as to why the parties have not been able to reach an
amicable resolution.
(6) The firm may request additional documentation from either the insurer or the insured,
or both. Requires the insurer and the insured to comply with any request for
additional documentation or provide an explanation as to the reason the insurer or
insured is not able to comply.
(7) Provides the insured can be represented by an attorney or other representative in the
mediation, the insured shall provide the name and the contact information for the
attorney or other representative to the mediator at least six days before the date of the
mediation.
(8) Requires the insurer and the insured to negotiate in good faith.
(9) Requires the insurer and the insured are given an opportunity to present their side of
the controversy. The insurer and the insured may utilize any relevant documents and
may bring any individuals with knowledge of the issues, like adjusters, appraisers,
or contractors, to address the mediator.
(10) Requires that all statements made and documents produced at a mediation are
considered settlement negotiations in anticipation of litigation as provided by prior
law.
(11) If an agreement is reached between the insurer and the insured, requires the insurer
and the insured to reduce the agreement to writing. Requires the insurer and the
insured to sign the agreement signifying the portions of the claim dispute that have
been resolved in whole or in part.
(12) Mediation is voluntary and nonbinding, however, if a written settlement is reached,
the insured has three business days that the insured can rescind the settlement unless
the insured has cashed or deposited any check or draft disbursed to the insured for the
disputed matters as a result of the mediation conference. If a settlement agreement
is reached and is not rescinded, the settlement agreement is binding and acts as a
release of all specific claims that were presented in that mediation conference.
(13) Requires the insurer to disburse to the insured the specific dollar amount agreed to
within 30 days of the conclusion of the mediation.
(14) If the insurer and the insured reach a partial agreement as to the claim dispute, allows
the insurer and the insured may continue to utilize the service of the mediator after
the insurer and insured have completed voluntary mediation. If the insurer and the
insured agree to further mediation, requires the insurer and the insured are
responsible for any additional mediation expenses at the mediator's standard rate.
(15) Mediation is voluntary and nonbinding, however, if a partial settlement is reached
and is in writing, the insured has three business days within which the insured can
rescind the settlement unless the insured has cashed or deposited any check or draft
disbursed to the insured for the disputed matters as a result of the conference. If a
settlement agreement is reached and is not rescinded, the settlement agreement is
binding and acts as a release of all specific claims that were presented in that
mediation conference.
New law provides that if the governor declares a state of emergency for a named windstorm
event, the insurer that writes residential property insurance that is located in this state,
requires the insurer to send a hurricane mediation program disclosure form (disclosure) to
an insured who has filed a residential property insurance claim for property that is located
in this state and within the geographic area of the named storm or windstorm that is subject
to the declared state of emergency. Requires the insurer to send the disclosure notice prior
to the initial investigation by either US mail, electronic mail, or by hand delivery.
New law provides that nothing in new law provides an insured with a civil cause of action.
New law provides nothing in new law applies to commercial insurance policies, private
passenger motor vehicle insurance, or disputes relating to liability coverages in policies of
property insurance.
New law authorizes the commissioner to promulgate rules and regulations necessary to
implement this new law.
Effective January 1, 2023.
(Adds R.S. 22:2651-2657)