Notice from the President on Recent Legal Malpractice Insurance Base Rate Increase The LSBA Board of Governors, at the recommendation of the Legal Malpractice Insurance Committee, recently approved a 14 percent base rate increase for the LSBA-sponsored professional liability insurance plan with CNA. The increase will become effective for all renewals beginning July 1, 2016. I am writing to advise you that the Board was particularly concerned about the size of the increase, but it ultimately approved the proposal based on its confidence in the Legal Malpractice Insurance Committee and how it handled the negotiations. Specifically, CNA initially requested a 26.1 percent increase, indicating that its rate formula demonstrated a need for this amount. However, Gilsbar, at the direction of the LSBA Legal Malpractice Insurance Committee, had an independent actuary analyze the experience and the actuarial calculations from CNA. Based on this analysis, Gilsbar was able to successfully negotiate cutting the proposed rate increase nearly in half. While this may seem like a sharp increase, our analysis suggested that it was justified and reasonable in light of the Louisiana claims experience and trend, including the payout on two large claims totaling more than $12 million closed out within the last year. It is important to note that since CNA became the endorsed carrier in 2001, overall rates (including the current increase) have averaged an increase of only 1.8 percent annually. Additionally, your actual rate may be higher or lower than the base rate depending on a variety of factors. These factors include: the five-year step factor for prior acts coverage; area of practice (AOP) factors based on the relative risks of different AOPs; adjustments for dabbling in complex areas outside of normal practice areas; claims factor based on frequency and severity; size of firm factor; and firm management factor based on management practices and history. I encourage members concerned about this rate increase to speak with their Gilsbar representatives to discuss their individual policies and how they will be impacted. The LSBA has worked hard through the Legal Malpractice Insurance Committee (whose members are all lawyer volunteers) to achieve the most favorable legal malpractice insurance rates, coverage and service for Louisiana lawyers and takes this role on behalf of its members very seriously. If any of you are interested in participating on this committee, I encourage you to submit your name to the LSBA for consideration in the upcoming committee assignments. In the meantime, please do not hesitate to contact me if you have any concerns or questions. My direct dial is (504)582-8536. My email is mcunningham@joneswalker.com. Sincerely, Mark A. Cunningham President, Louisiana State Bar Association