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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2010
SENATE BILL NO. 677
BY SENATOR HEBERT
INSURERS. Provide for investments of domestic insurers. (8/15/10)
AN ACT1
To amend and reenact R.S. 22:598(11), 692(3), and 703(K), relative to financial solvency2
and reporting requirements; to provide for investments of domestic insurers; to3
provide for investments in electronic data processing equipment; to provide4
definitions; to provide for a disclaimer of affiliation; and to provide for related5
matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:598(11), 692(3), and 703(K) are hereby amended and reenacted8
to read as follows: 9
§598. Admitted assets10
For the purposes of this Subpart, the following assets, if owned by a domestic11
insurer, shall be known as admitted assets:12
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(11) Electronic and mechanical machines constituting a data processing14
equipment as defined by the NAIC Accounting and Procedures Manual and15
accounting system, if the cost of such system is at least ten thousand dollars, which16
costs shall be amortized in full over a period not to exceed ten calendar years. The17 SB NO. 677
SLS 10RS-735 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
book value of the apparatus and equipment shall not exceed two percent of the1
admitted assets of the insurer.2
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§692. Definitions4
As used in this Subpart, the following terms shall have the respective5
meanings hereinafter set forth, unless the context shall otherwise require:6
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(3) "Control" means the possession, direct or indirect, of the power to direct8
or cause the direction of the management and policies of a person, whether through9
the ownership of voting securities, by contract other than a commercial contract for10
goods or nonmanagement services, or otherwise, unless the power is the result of an11
official position with or corporate office held by the person. Control shall be12
presumed to exist if any person, directly or indirectly, owns, controls, holds with the13
power to vote, or holds proxies representing ten percent or more of the voting14
securities of any other person. This presumption may be rebutted by a showing made15
in the manner provided by R.S. 22:703(K) that control does not exist in fact. The16
commissioner may determine, after furnishing all persons in interest notice and17
opportunity to be heard and making specific findings of fact to support such18
determination, that control exists in fact, notwithstanding the absence of a19
presumption to that effect.20
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§703. Registration of insurers22
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K. Disclaimer. Any person may file with the commissioner a disclaimer of24
affiliation with any authorized insurer, or such a disclaimer may be filed by such25
insurer or any member of an insurance holding company system. The disclaimer26
shall fully disclose all material relationships and bases for affiliation between such27
person and such insurer as well as the basis for disclaiming such affiliation. After a28
disclaimer has been filed, the insurer shall be relieved of any duty to register or29 SB NO. 677
SLS 10RS-735 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
report under this Section which may arise out of the insurer's relationship with such1
person unless and until the commissioner disallows such a disclaimer. The person2
filing such a disclaimer shall notify the commissioner of any material change to3
the affiliations and relationships as reported in the disclaimer within thirty days4
of the effective date of the change. The commissioner shall disallow such a5
disclaimer only after furnishing all parties in interest with notice and opportunity to6
be heard and after making specific findings of fact to support such disallowance.7
* * *8
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Mary Dozier O'Brien.
DIGEST
Present law includes as admitted assets of an insurer any electronic and mechanical
machines constituting a data processing and accounting system provided the cost is at least
$10,000 which costs are amortized in full over a period not to exceed 10 years.
Proposed law eliminates "mechanical machines" and includes as admitted assets electronic
data processing equipment as defined in the NAIC Accountancy and Procedures Manual.
Proposed law removes any qualifications on the cost and on the value of such data
processing equipment, in order to be an admitted asset.
Present law provides that the presumption of control of an insurer in an insurance holding
company may be overcome by use of a disclaimer. Proposed law deletes provision for use
of disclaimers and allows the presumption of control to be rebutted by a showing that control
does not exist in fact.
Present law provides for a disclaimer of affiliation with an insurer, and authorizes the
commissioner of insurance to disallow the disclaimer after furnishing all parties in interest
notice and opportunity to be heard and after making specific findings of fact to support
disallowance.
Proposed law removes this provision and requires a person filing a disclaimer to notify the
commissioner of any material change to the affiliations and relationships as reported in the
disclaimer within 30 days of the change.
Effective August 15, 2010.
(Amends R.S. 22:598(11), 692(3), and 703(K))