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House Insurance to Address Bad Faith Penalties
A measure strengthening accountability for the mishandling of claims on a case-by-case basis is set for consideration during today’s House Insurance Committee meeting.
HB 577 by Rep. Brian Glorioso (R-Slidell) adjusts the penalty provision to allow courts to award up to 50% of the amount due when an insurer is found to have acted arbitrarily, capriciously or without probable cause.
This approach preserves existing protections for policyholders and maintains accountability for improper claim handling, while giving courts flexibility to tailor penalties to the facts of each case. It also addresses concerns that the current mandatory penalty can sweep in insurers whose conduct does not reflect true bad faith, an outcome that was never the intent of the law, thereby promoting more balanced results.