RS 22:601.20

463 words·~2 min read·/la/title-22/22-2513

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RS 22:601.20

§601.20. Loans to officers and directors

A. An insurer shall not, directly or indirectly, do any of the following:

(1)Invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer, director, or controlling stockholder of the insurer.

(2)Invest in or loan upon any real estate which is owned or partly owned by any officer, director, or controlling stockholder of the insurer, nor shall any such insurer invest in or loan upon any bond or note secured by mortgage or trust deed on real estate if an officer, director, or controlling stockholder of such insurer is an owner or part owner of the real estate upon which the loan is made.

(3)Invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which ten percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers, directors, or controlling stockholders of the insurer, except as authorized in R.S. 22:691.7.

B. No insurer shall, without the prior written approval from the commissioner of insurance, directly or indirectly do any of the following:

(1)Make a loan to or other investment in an officer, director, or controlling stockholder of the insurer or a person in which the officer, director, or controlling stockholder has any direct or indirect financial interest.

(2)Make a guarantee for the benefit of or in favor of an officer, director, or controlling stockholder of the insurer or a person in which the officer, director, or controlling stockholder has any direct or indirect financial interest.

(3)Enter into an agreement for the purchase or sale of property from or to an officer, director, or controlling stockholder of the insurer or a person in which the officer, director, or controlling stockholder has any direct or indirect financial interest.

C. An insurer may make, without the prior written approval of the commissioner, policy loans in accordance with the terms of the policy or contract issued to an officer, director, or controlling stockholder.

D. This Section shall not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with R.S. 22:691.7, other than a transaction between an insurer and its officers, directors, or controlling stockholders.

E. Any officer, director, or controlling stockholder knowingly participating in or abetting the violation of any provision of this Section where fraud is shown to exist shall be fined not less than one thousand dollars nor more than ten thousand dollars, or imprisoned not more than ten years, or both.

Acts 2021, No. 165, §1, eff. Jan. 1, 2022.