RS 22:454

474 words·~2 min read·/la/title-22/22-490

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RS 22:454

§454. Insolvency deposit

A. All self-insurers shall, before receiving a certificate of authority, deposit with the commissioner a safekeeping or trust receipt from a bank doing business within the state or from a savings and loan association chartered to do business in this state indicating that the self-insurer has deposited cash, or bonds of the United States, the state of Louisiana, or any political subdivision of the state, of the par value of not less than the greater of either one of the following items:

(1)One hundred thousand dollars.

(2)(a) Thirty percent of the self-insurer's outstanding Louisiana-related reserve liabilities. For the purposes of this Subsection, reserve liabilities shall be computed with proper regard for the following items:

(i)Known claims paid and outstanding.

(ii)A history of incurred but not reported claims.

(iii)Claims handling expenses.

(iv)Unearned premium.

(v)An estimate for bad debts.

(vi)A trend factor.

(vii)A margin for error.

(b)All securities deposited pursuant to this Subsection shall be held in trust for the benefit and protection of and as security for all policyholders of the self-insurer making such deposit.

B. Each receipt or other evidence of deposit or security shall contain a restriction which shall read as follows:

"ACKNOWLEDGEMENT OF RESTRICTION

The cash or other deposit evidenced by this receipt shall be held by the issuer or its successors or assigns, to demonstrate to the Louisiana Department of Insurance that the owner-payee of the receipt is financially responsible and capable of performing its obligations as a self-insurer. This certificate shall be renewed and renegotiated between the issuer and the owner-payee without the necessity of the receipt's release or surrender and funds evidenced hereby shall remain on deposit at or with the issuing institution, its successors or assigns, until notice of release or a demand of payment signed by the duly authorized elected incumbent commissioner of insurance of the state of Louisiana, or his duly authorized deputy, has been presented to issuer.

Any issuer making payment to the commissioner upon his written demand and upon a showing of good cause shall not be liable in any manner to the owner-payee or any other person for having made such disbursement of funds. Interest earned on the funds evidenced hereby shall be paid to the owner-payee on a regular periodic basis as agreed to by the issuer and the owner-payee."

C, D. Repealed by Acts 2012, No. 680, §2, eff. June 7, 2012.

E. Repealed by Acts 2009, No. 503, §2.

Acts 1984, No. 857, §1; Acts 1990, No. 902, §1; Redesignated from R.S. 22:3004 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §2; Acts 2012, No. 680, §§1, 2, eff. June 7, 2012.

NOTE: Former R.S. 22:454 redesignated as R.S. 22:183 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.