Prohibits the use of insurer's advertising expense in setting rates. (8/1/26)

Senate Bill 298 amends Louisiana's insurance rate regulation statutes to prohibit insurers from including advertising expenses when determining their rates. The bill modifies R.S. 22:1452(C)(7) to remove the reference to institutional advertising expenses from the definition of expenses that may be considered in rate setting, and it amends R.S. 22:1454(B)(3) to explicitly prohibit insurers from considering institutional advertising expenses when setting rates. Additionally, the bill repeals R.S. 22:1452(C)(9.1), which previously defined institutional advertising expenses, effectively removing any statutory framework that would allow such expenses to be incorporated into rate calculations.

The practical effect of this legislation falls directly on insurance companies operating in Louisiana. Insurers will no longer be permitted to pass advertising costs through to consumers by incorporating those expenses into their premium rates. This prevents the cost of an insurer's marketing and promotional activities from being factored into the rate-setting process, potentially resulting in lower rates for policyholders. The Louisiana Department of Insurance, which oversees rate filings and approvals, will need to scrutinize rate submissions to ensure compliance with this prohibition and reject any rates that improperly include advertising expenses.

This legislation operates within Louisiana's broader insurance rate regulation framework established in Title 22 of the Louisiana Revised Statutes, which grants the Commissioner of Insurance authority to regulate unfair, excessive, or discriminatory rates. The bill fits into the existing statutory scheme that already delineates which operating expenses insurers may legitimately factor into rates. By removing institutional advertising from permissible expenses, the statute aligns with a policy determination that advertising costs represent discretionary business expenditures that should not be subsidized by consumers through their insurance premiums, distinguishing such costs from necessary operational expenses like acquisition costs, field supervision, and administrative overhead that remain permitted under the law.