House committee advances bill to clarify insurance‑fraud authority and cooperation with law enforcement

The House Insurance Committee on Wednesday advanced House Bill 739, a measure its sponsor said is intended to clear up ambiguity over the Department of Insurance’s authority to investigate insurance fraud and to strengthen coordination with law enforcement.

Representative Barrault, the bill’s sponsor, told the committee the bill is "a pretty basic anti‑fraud bill" to "clarify some language" and to let the commissioner issue cease‑and‑desist orders and act against people "acting as insurance agents but are not licensed to do that." He said the changes are meant to "enhance regulatory clarity" and reduce fraud over the long term.

Adam Patrick, deputy commissioner for policy innovation and research at the Department of Insurance, told the committee the department has in recent years received adverse rulings from the division of administrative law that limited its authority over persons who are not licensed by the department. "If they're not licensed by the department, then we don't have regulatory authority over them," Patrick said, adding that several of the cases he was aware of were property‑and‑casualty matters but that the bill is intended to apply across lines.

The committee adopted a technical amendment (set 19‑15) requested by the division of administrative law that would allow an unlicensed person subject to a department enforcement action to appeal through the division of administrative law — the same channel available under the Administrative Procedure Act — rather than going straight to district court.

Luke Williamson of the Louisiana Association of Justice said his group supports anti‑fraud efforts but sought clearer language to preserve the Supreme Court’s regulation of the practice of law. The committee adopted a committee‑originated amendment (set 19‑30) clarifying that the bill’s provisions "do not apply to lawyers lawfully engaged in the practice of law," with the sponsor and department emphasizing the intention to exclude routine legal practice while still allowing action when an attorney is acting as an adjuster, agent or otherwise engaging in non‑legal activities.

Representative Barrault closed by asking for favorable passage. With no objections, the committee reported HB 739 favorably as amended.

What it means: The bill clarifies that the Department of Insurance can issue administrative orders and, with law‑enforcement consent, continue to collaborate on investigations that may have a criminal component, while the adopted amendment aims to avoid stripping the judiciary and bar regulators of authority over lawful legal representation.

Next steps: HB 739 was reported out of committee as amended and will proceed through the legislative process toward floor consideration.