(The Center Square) — The Louisiana Department of Insurance could do more to improve claims handling, though the department is complying with the law to ensure companies are handling claims in a fair and timely manner, according to a Louisiana Legislative Auditor’s report.

Louisiana Legislative Auditor Mike Waguespack issued an audit report last week on the regulation of residential property insurance by LDI that included highlights from 2020 and 2021, as well as recommendations for changes by the department and Legislature.

“Overall, we found that LDI has procedures and practices to ensure that insurance companies follow the law and handle claims in a fair and timely manner,” Waguespack wrote to lawmakers. “However, we identified additional ways LDI could strengthen these activities, as well as a revision to Louisiana’s insurance code the Legislature may wish to consider.”

The majority of complaints to LDI for those two years centered on claims handling issues and the department’s response was not as quick as years past, according to the report.

“While LDI exceeded its goal of completing 70% of complaint investigations within 42 days during calendar years 2017 through 2019, that percentage dropped to 55.9% in the wake of the calendar year 2020 and 2021 hurricanes,” Waguespack wrote. “LDI also did not always report accurate information related to complaints, including the outcome of investigations and the amount recovered as a result of its investigations.”

The declining percentage came as residential property complaints increased 1,094% between 2019 and 2021 to 5,264. The inaccurate reporting included the miscalculation of $22.6 million in recovered funds in 2020 and 2021, according to the report.

LDI’s market conduct monitoring complied with state law and best practices, though auditors found revising the law to include more time frame requirements could help claims handling. Auditors pointed to requirements outlined in last session’s House Bill 936.

“LDI conducted a total of 196 market conduct investigations covering all lines of insurance during calendar years 2019 through 2021,” according to the report. “Of the 196 investigations, 56 (28.6%) were related to homeowners insurance companies and included issues related to business practices and claims handling.”

LDI officials agreed with all of major findings in the LLA report and have taken some steps to address them. The department is resume a quality assurance process that was shut down during the pandemic due to a deluge of hurricane related complaints, and is also stepping up efforts to ensure catastrophe adjusters are licensed.

LDI also implemented a new procedure to identify companies with potential claims handling issues during its annual market conduct analysis, according to the report.