HLS 10RS-241 ORIGINAL
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Regular Session, 2010
HOUSE BILL NO. 1147
BY REPRESENTATIVE GALLOT
INSURANCE/AUTOMOBILE: Prohibits a policyholder from allowing any person
excluded from liability coverage to drive the covered vehicle
AN ACT1
To amend and reenact R.S. 32:900(L) and to enact R.S. 32:900.1, relative to motor vehicle2
liability policies; to require any person being excluded from coverage under a motor3
vehicle policy be a party to the written agreement and sign the driver exclusion form;4
to require the completion of a new driver exclusion form under certain5
circumstances; to prohibit a policyholder from permitting any person excluded from6
coverage under the policy from operating the covered vehicle absent certain7
circumstances; to provide for enforcement by the Department of Public Safety and8
Corrections or local law enforcement; to authorize the department or local law9
enforcement to investigate violations and issue citations; to establish penalties in the10
form of driver's license suspensions, fines, and insurer policy premium increases or11
cancellations; to provide a special effective date; and to provide for related matters.12
Be it enacted by the Legislature of Louisiana:13
Section 1. R.S. 32:900(L) is hereby amended and reenacted and R.S. 32:900.1 is14
hereby enacted to read as follows: 15
§900. "Motor Vehicle Liability Policy" defined16
* * *17
L.(1) Notwithstanding the provisions of Paragraph (B)(2) of this Section, an18
insurer and an insured may by written agreement exclude from coverage the named19
insured and the spouse of the named insured only if the person being excluded is a20 HLS 10RS-241 ORIGINAL
HB NO. 1147
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party to the written agreement and executes the driver exclusion form. The insurer1
and an insured may also exclude from coverage any other named person who is a2
resident of the same household as the named insured at the time that the written3
agreement is entered into only if the person being excluded is a party to the written4
agreement and executes the driver exclusion form, and the exclusion shall be5
effective, regardless of whether the excluded person continues to remain a resident6
of the same household subsequent to the execution of the written agreement. It shall7
not be necessary for the person being excluded from coverage to execute or be a8
party to the written agreement. For the purposes of this Subsection, the term "named9
insured" means the applicant for the policy of insurance issued by the insurer.10
(2) The form signed by the insured or his legal representative and the person11
being excluded which excludes a named person from coverage shall remain valid for12
the life of the policy and but shall not require the completion of a new driver13
exclusion form when a renewal, reinstatement, substitute, or amended policy is14
issued regardless of whether it is issued to the same named insured by the same15
insurer or any of its affiliates. Any changes to an existing policy, including but not16
limited to the addition of vehicles or insured drivers to said the policy, regardless of17
whether these changes create new coverage, do not create a new policy and do not18
require the completion of a new agreement excluding a named person from coverage.19
For the purpose of this Subsection, a new policy shall mean an original contract of20
insurance which an insured enters into through the completion of an application on21
the form required by the insurer.22
§900.1. Permission given to excluded persons; enforcement; penalties23
A. No policyholder insured by a motor vehicle liability insurance policy24
shall expressly or implicitly permit any person excluded from coverage under that25
policy to operate the covered motor vehicle, unless the excluded person is otherwise26
covered by an applicable motor vehicle insurance policy.27
B. The provisions of this Section shall be enforced by the Department of28
Public Safety and Corrections or by any local law enforcement agency. The29 HLS 10RS-241 ORIGINAL
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Department of Public Safety and Corrections or its designee may provide forms,1
including citations and complaint forms to local law enforcement agencies for use2
in enforcement of this Section.3
C. The deputy secretary for public safety services in the Department of4
Public Safety and Corrections or any local law enforcement agency shall have the5
right to:6
(1) Investigate any complaint relating to the violation of this Section.7
(2) Issue citations for violations of the provisions of this Section in addition8
to other enforcement powers provided by law.9
D. Any policyholder who, after notice and a hearing, is determined to have10
violated the provisions of this Section shall be penalized by the Department of Public11
Safety and Corrections as follows:12
(1) For permitting a person excluded from coverage under a motor vehicle13
liability policy of insurance to operate the covered vehicle, the policyholder shall be14
fined two hundred fifty dollars for the first offense and a minimum of one thousand15
dollars for each subsequent offense that occurs within a five-year period from any16
prior offense.17
(2) In addition to the imposition of a fine, if the policyholder violates the18
provisions of this Section three or more times that policyholder's driver's license may19
be suspended for three months up to one year based on the number of violations and20
the discretion of the Department of Public Safety and Corrections.21
E. Any policyholder who violates the provisions of this Section shall also be22
subject to an increase in the policy premium or the cancellation of his motor vehicle23
liability insurance policy, at the discretion of the insurer who issued such policy.24
F. Any person investigated or cited under this Section shall have an25
opportunity to present a good faith defense, including but not limited to the lack of26
knowledge or proof of insurance. As such, the provisions of this Section shall not27
apply to a situation involving an excluded driver who is otherwise covered by an28
applicable motor vehicle liability policy.29 HLS 10RS-241 ORIGINAL
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Section 2. The provisions of this Act shall become effective on January 1, 2011.1
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Gallot HB No. 1147
Abstract: Prohibits a policyholder from permitting any person excluded from coverage
under the motor vehicle liability policy to operate the policyholder's vehicle.
Present law (R.S. 32:900(L)(1)) authorizes an insurer and an insured to exclude from
coverage, by written agreement, the named insured, the spouse of the named insured, and
any other named person who is a resident of the same household. Specifies that the
exclusion is effective even if after the execution of the agreement the excluded person no
longer resides in the same household as the insured. Also, provides that the person being
excluded from coverage does not have to execute or be a party to the written agreement.
Proposed law changes present law by requiring that the person being excluded be a party to
the written agreement and executes the driver exclusion form. Proposed law also removes
the provision which allows the exclusion of a person without such person being a party to
the written agreement or signing such agreement.
Present law (R.S. 32:900(L)(2)) provides that the exclusion form that is signed by the
insured or his legal representative is valid for the life of the policy and does not require the
completion of a new driver exclusion form when a renewal, reinstatement, substitute, or
amended policy is issued to the same named insured by the same insurer or any of its
affiliates. Also, provides that any changes to an existing policy, including but not limited
to the addition of vehicles or insured drivers, regardless of whether these changes create new
coverage, do not create a new policy and do not require the completion of a new agreement
excluding a named person from coverage. Defines "new policy" as an original contract of
insurance which an insured enters into through the completion of an application on the form
required by the insurer.
Proposed law changes present law by requiring that the exclusion form signed by the insured
or his legal representative also include the person being excluded. Further, specifies that the
named person exclusion is valid for the life of the policy but requires the completion of a
new driver exclusion form when a renewal, reinstatement, substitute, or amended policy is
issued regardless of whether it is issued to the same named insured by the same insurer or
any of its affiliates. Also, changes present law to require the completion of a new agreement
excluding a named person from coverage when there are changes to an existing policy,
regardless of whether these changes create new coverage. Also, removes the definition of
"new policy" in present law.
Proposed law prohibits any policyholder from expressly or implicitly permitting a driver
excluded under the motor vehicle liability policy from operating the covered vehicle.
Proposed law authorizes the Dept. of Public Safety and Corrections (DPS&C) or local law
enforcement to enforce the law. Also, allows the DPS&C to provide forms, such as citations
and complaints, to local law enforcement agencies for use in enforcing the law.
Proposed law requires the deputy secretary for public safety services or any local law
enforcement agency to investigate complaints and issue citations for violations. HLS 10RS-241 ORIGINAL
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Proposed law provides that after notice and a hearing, any policyholder who is determined
to have violated the law is subject to a penalty imposed by DPS&C as follows:
(1)A $250 fine for the first offense and $1000 for each subsequent offense in a five-year
period.
(2)For three or more violations, the policyholder's driver's license may be suspended for
three months up to one year based on the number of violations and the discretion of
DPS&C.
Proposed law also allows the insurance company who issued a motor vehicle liability policy
to increase the premium or cancel such policy if the policyholder allows a person excluded
from coverage under the policy to drive the covered vehicle.
Proposed law provides that policyholders may present a defense to the accusation of
permitting an excluded driver to operate a covered vehicle which includes but is not limited
to a lack of knowledge or proof of insurance defense. Proposed law does not apply to an
excluded driver who is otherwise covered by applicable motor vehicle insurance.
Effective Jan. 1, 2011.
(Amends R.S. 32:900(L); Adds R.S. 32:900.1)