In the 2024 legislative session, Louisiana passed Act No. 275, a significant revision to the state’s laws governing direct actions against insurers. This statute reshapes how plaintiffs pursue claims directly against insurance companies. Under the new statute, plaintiffs no longer have an automatic right to file a direct action against an insurer unless specific conditions are met. These conditions include cases where:

• The insured files for bankruptcy.
• The insured is insolvent.
• Service of process cannot be made on the insured or the insured fails to defend the action.
• The claim involves a dispute between family members (parents and children or spouses).
• The insurer is an uninsured motorist carrier.
• The insured is deceased.
• The insurer is defending the lawsuit under a reservation of rights or has denied coverage.

These provisions represent a shift from the broad latitude previously granted to plaintiffs, tightening the circumstances in which an insurer may be sued directly.

The statute introduces a requirement that insurers cannot be named in the caption of a case when a direct action is brought. Moreover, the existence of insurance coverage is not to be disclosed to the jury unless specifically required by law, helping to prevent potential biases in jury decision-making.

The law allows for an insurer to be joined as a defendant after a judgment or settlement has been reached, provided certain conditions are met. This provision aims to streamline the enforcement of judgments while balancing the insurer’s right to contest liability.

Notably, filing an action against the insured will now interrupt prescription (i.e., the running of the statute of limitations) for claims against any insurers whose policies provide coverage.

Insurers are now required to issue a written notice of reservation of rights within 90 days of identifying a coverage defense, and no later than 30 days before trial. This allows both the insured and other parties to be informed about potential coverage disputes in a timely manner.

Act No. 275 reflects the legislature’s efforts to curb perceived abuses in direct action litigation, responding to rising insurance rates and concerns about fraud. By preventing the naming of insurers in most lawsuits, the statute aims to foster a fairer litigation process.