SB437 – Sen. Robert Mills and HB1078 – Rep. Alan Seabaugh will authorize the creation of the Louisiana Agriculture Transportation Group SIF
This is such an exciting and forward-thinking bill that will allow the agricultural industries to take the insurance crisis into our own hands and move forward the best we can. Offering another provider within the state will grow competition, thus helping to move insurance premiums into affordable waters. SB437 and HB1078 will authorize the creation of the La Ag Transportation Group SIF for the purpose of providing auto coverage for vehicles that transport timber and agriculture products. This law will provide an opportunity for five or more Louisiana Timber or agriculture companies, who are not public entities, each of whom have a positive net worth and are financially solvent, to pool their liabilities and self-insure for the purposes of maintaining automobile coverage for timber and agriculture transportation vehicles. The law will require that all members of the fund MUST also be a member of one or more “bona fide trade or professional association”. The association must be an active trade or professional association that promotes Louisiana Timber or agriculture production, is charted and domiciled in Louisiana, has been in existence and conducted regular meetings for at least five years and is not established for the primary purpose of operating a self-insured fund.
In the early 90’s, Work comp costs rose exponentially to the point where businesses were folding due to the increased costs. Self-insured funds were created to provide reasonable costs and the added benefit of returning unused dividends to their members. The creation of this fund will hopefully be the solution to the insurance crisis, just as the work comp funds were in the ‘90s.
“Growing up in Bienville Parish, I recall how the logging and agriculture industries were once the economic engines of small North Louisiana towns. Family-owned logging companies and farms provided jobs for young people but also provided support for retail shops, churches, and high school fundraising activities in their communities. The loss of the logging industry in many of those small towns in recent years can be traced to one thing: unavailable or unaffordable log truck insurance. The resulting loss of many of those family-owned logging companies has had a domino effect in rural North Louisiana, causing other businesses to close their doors and whole communities to suffer. It has truly been an honor to assist state Senator Robert Mills in drafting SB 437, to make log truck insurance more affordable for some very deserving Louisiana family-owned businesses. Fighting for hard working families and small businesses is what Sen. Mills does best.” – Carla S. Roberts (Attorney with the Louisiana Senate)
“It was the culmination of nearly three years of teamwork when the SB 437 was passed during the 2022 legislative session. The high cost of liability insurance for log trucks was the subject of one of my first bills in 2020. That effort failed but with continued efforts of my Senate Attorney, Ms. Carla Roberts of Saline, La and the addition of Alan Seabaugh and Jack McFarland as co-authors, we restructured the effort and successfully passed into law a self-insurance option for logging and agricultural trucking operators that should be a game-changer for the best operators. SB 437 takes advantage of the latest insurance developments and with an emphasis on best practices, logging and agricultural truckers should be able to acquire affordable liability insurance and continue their very valuable services to our state.” – Senator Robert Mills
“Nobody should ever go out of business or stop operating due to an inability to obtain affordable liability insurance. This legislation is not going to completely solve the litigation problem or make it go away, but it is a crucial step in providing relief to businesses that really need and deserve a break. Thousands of Northwest Louisiana families are fed and supported by the logging industry. It has earned our support. It was an honor for me to be involved in drafting and passing this legislation.” – Representative Alan Seabaugh
“Almost all large companies use some form of self-insurance to manage their risk. Since these companies have the financial resources to handle the exposures, it is a better management tool than transferring the risk to an insurance company. With the passing of SB437, the state of Louisiana has now given the same tool to smaller entities. A self-insured group allows multiple companies and individuals to pool their risk and exposure to obtain the leverage in the insurance marketplace. The group will have a lower cost structure than an insurance company, but the strongest advantage will be that profits are returned to the members of the group and not the stockholders of an insurance company. Investment income accrues to the group. The program will buy reinsurance to protect the collective assets of its members and limit the groups exposure. SB437 is specifically designed to cover the vehicle exposures arising out of the agricultural and timber industries. We look forward to seeing how the Louisiana Agriculture Transportation Group Self-Insured Fund can change the marketplace for the betterment of Louisiana companies.” – Terry Duke, Louisiana Loggers Self-Insured Fund, Gallagher
Although much work has to be done, the Louisiana Loggers Association is extremely optimistic on the future of this program. We look forward to developing and growing with the Louisiana Agriculture Transportation Group to help move the agricultural industry forward.
Toni McAllister, Executive Director