(May 28)
State legislators failed to show enough spine to block or even improve a terribly misguided insurance-regulating bill, pushed by Gov. Jeff Landry, that will over-centralize overly arbitrary power in the hands of Louisiana’s current and future insurance commissioners.
House Bill 148, as now passed by both the state House and Senate and signed by Landry, is a flat-out bad law. Two particular provisions in it make it noticeably worse than the already-problematic version of the bill that was originally introduced (as House Bill 576) in the House.
Every legislator with an ounce of sense knows how important the difference is between the words “may” and “shall” in legislation. And every legislator claiming to be in any way a constitutional conservative should heed the antipathy the nation’s founders held against highly concentrated arbitrary power. As James Madison, the “Father of the Constitution,” explained at great length in the Federalist Papers, the nation’s charter was specially designed to guard against such power.
HB148 falls horribly on the wrong side of both the may/shall test and of the warnings against arbitrary, concentrated authority.
The first bad provision is one about which I have written twice this spring. Legislators still got it wrong.
As originally introduced, the bill would have given the insurance commissioner, acting alone, the ability to reject requests for rate increases that he determines are “excessive,” but specified that he “shall not make such a determination if the rate is actuarially justified.” In other words, even when assuming additional, unilateral power, the commissioner at least would be obliged to justify his decisions by reference to real data from actuarial tables and evidence.
Every Louisianan should want regulatory decisions to rely on empirical data, not on personal whims or political favors.
At Landry’s personal direction, the House passed HB148 without any reference at all to actuarial data. Such a provision could be an open invitation to corruption.
Sensing blowback, the Senate re-amended the bill so that it again refers to actuarial data. The amendment, alas, is a fig leaf so puny and tattered that in reality it covers virtually nothing…. [The full column is here.]
