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words in boldface type and underscored are additions.
Regular Session, 2010 ENROLLED
SENATE BILL NO. 792 (Substitute for Senate Bill No. 136 by Senator Morrish)
BY SENATOR MORRISH
AN ACT1
To amend and reenact R.S. 22:2134(B)(3)(d), R.S. 40:1421, the introductory paragraph of2
1422(A), 1422(C), the introductory paragraph of 1427, 1427(1) and (3), 1428(A)(1)3
and (4)(a) and (C), and 1429, relative to the insurance fraud investigation unit within4
the Department of Public Safety and Corrections, public safety services, office of5
state police; to provide for definitions; to provide for powers and duties of the unit;6
to provide for reporting; to provide relative to the Insurance Fraud Investigation7
Fund; to extend the termination date of the unit; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 22:2134(B)(3)(d) is hereby amended and reenacted to read as10
follows:11
§2134. Automobile Theft and Insurance Fraud Prevention Authority Fund12
* * *13
B. Any monies in the Automobile Theft and Insurance Fraud Prevention14
Authority Fund shall be administered only by the director of the authority, upon a15
majority vote of the board, in the following order of priority:16
* * *17
(3) To achieve the purposes and objectives of this Part, which may include18
but not be limited to the following:19
* * *20
(d) Conducting educational and public awareness programs designed to21
inform motor vehicle owners the citizens of the state about methods of preventing22
motor vehicle theft and combating insurance fraud.23
* * *24
Section 2. R.S. 40:1421, the introductory paragraph of 1422(A) and 1422(C), the25
introductory paragraph of 1427, 1427(1) and (3), 1428(A)(1) and (4)(a) and (C), and 142926 SB NO. 792 ENROLLED
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are hereby amended and reenacted to read as follows:1
§1421. Definitions2
As used in this Chapter, the following words shall have the following3
meanings:4
(1) "Commissioner" means commissioner of insurance.5
(2) "Fraud unit" or "unit" means the insurance fraud investigation unit within6
the Department of Public Safety and Corrections, office of state police.7
(3) "Fraud support unit" means the insurance fraud support unit within the8
Department of Justice.9
(4) "Insurance fraud" means any commission or attempted commission of10
criminal acts or practices as provided in R.S. 22:1923, 1924, or 1925 which involves11
any type of insurance as provided in R.S. 22:47.12
(5) "Insurance fraud section" means the insurance fraud section within13
the Louisiana Department of Insurance.14
(5)(6) "Insurance policy" means a contract or other written instrument15
between an insured and insurer setting forth the obligations and responsibilities of16
each party.17
(6)(7) "Insurance premium finance company" means a person engaged or18
purporting to engage in the business of advancing money, directly or indirectly, to19
an insurer or producer at the request of an insured pursuant to the terms of a premium20
finance agreement, including but not limited to loan contracts, notes, agreements, or21
obligations, wherein the insured has assigned the unearned premiums, accrued22
dividends, or loss payments as security for such advancement in payment of23
premiums on insurance policies only, and does not include the financing of insurance24
premiums purchased in connection with the financing of goods and services.25
(7)(8) "Insurance professional" means an adjuster, agent, managing general26
agent, surplus lines broker, reinsurance intermediary, insurance consultant, broker,27
or attorney-in-fact.28
(8)(9) "Insurance transaction", "insurance business", and "business of29
insurance" include solicitation, negotiations preliminary to execution of an insurance30 SB NO. 792 ENROLLED
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contract, execution of an insurance contract and the transaction of matters subsequent1
to execution of a contract and arising out of it, and matters arising out of any2
relationship among or between an insured, an insurer, and a third party for which an3
insurance policy provides coverage.4
(9)(10) "Insured" means any person covered by an insurance policy.5
(10)(11) "Insurer" means any person or company subject to regulation6
pursuant to Title 22 of the Louisiana Revised Statutes of 1950.7
(12) "LATIFPA" means the Louisiana Automobile Theft and Insurance8
Fraud Prevention Authority within the Louisiana Department of Insurance.9
§1422. Insurance fraud investigation unit; powers and duties10
A. There is hereby created an insurance fraud investigation unit in the11
Department of Public Safety and Corrections, public safety services, office of state12
police, and the unit shall be solely dedicated to the investigation of property and13
casualty, worker's compensation, life, and health insurance fraud. The purposes14
of this unit shall be to:15
* * *16
C. The police employees of the unit shall have the same duties and powers17
as are provided for other police employees of the office in R.S. 40:1379 and such18
other duties as are assigned by the deputy secretary of public safety services of the19
Department of Public Safety and Corrections. The police employees of the unit20
shall complete the National Insurance Crime Training Academy, phases 1, 2,21
and 3, and Fraud Claims Law Specialist program, within the first two years of22
assignment to the unit.23
* * *24
§1427. Reports25
The insurance fraud investigation unit, fraud support unit, and insurance26
fraud section shall submit an a combined annual report to the governor and the27
insurance committees of each house of the legislature no later than February fifteenth28
of each year on the progress made in deterring insurance fraud. Such report shall29
detail:30 SB NO. 792 ENROLLED
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(1) All expenditures and receipts of the insurance fraud investigation unit,1
fraud support unit, and insurance fraud section.2
* * *3
(3) The results achieved as a consequence of such expenditures, including4
the number of notifications or inquiries received, the number of inquiries and5
investigations undertaken, the number of inquiries to which an investigation was not6
initiated, the number of arrests, the number of files presented to prosecutors, the7
number of prosecutions, the number of convictions, and the total dollar amount of8
restitution resulting from the operation of the insurance fraud investigation unit,9
fraud support unit, and insurance fraud section, as applicable to each.10
§1428. Special assessment; creation of fund11
A.(1) Except as provided in Paragraph (2) of this Subsection, the12
commissioner of insurance may assess a fee on the direct premiums received by each13
insurer licensed by the Department of Insurance to conduct business in this state.14
Such fee shall be imposed by rule adopted by the commissioner in accordance with15
the Administrative Procedure Act. The total fees assessed for any year shall not16
exceed the amount necessary to pay the costs of investigation, enforcement, public17
education and public awareness, and prosecution of insurance fraud in this state18
by the programs to which funds are allocated in Paragraph (4) of this Subsection.19
The total fee assessed in any year shall not exceed an amount equal to 0.00037520
multiplied times the annual direct premium dollars received that are subject to the21
fee.22
* * *23
(4)(a) Prior to making the allocations specified in Subparagraph (b) of this24
Paragraph, the commissioner of insurance is authorized to withhold the sum of thirty25
thousand dollars per year from the fees collected pursuant to this Section to defray26
the expense of collection of the fees, enforcement of this Subpart, and operation of27
the Department of Insurance and shall withhold one hundred eighty-seven28
thousand dollars to fund the Louisiana Automobile Theft and Insurance Fraud29
Prevention Authority pursuant to R.S. 22:2134.30 SB NO. 792 ENROLLED
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* * *1
C. After compliance with the requirements of Article VII, Section 9(B) of the2
Constitution of Louisiana relative to the Bond Security and Redemption Fund, an3
amount equal to that deposited as required by Subsection B of this Section shall be4
credited to a special fund hereby created in the state treasury to be known as the5
Insurance Fraud Investigation Fund. The monies in this fund shall be used solely as6
provided by Subsection A of this Section and only in the amounts appropriated by7
the legislature. All unexpended and unencumbered monies in this fund at the end of8
the fiscal year shall remain in such fund. The monies shall be irrevocably9
dedicated and deposited in the Insurance Fraud Investigation Fund and shall10
be used solely as provided in Subsection A of this Section and only in the11
amounts appropriated by the legislature. Monies in the fund shall be12
appropriated, administered, and used solely and exclusively for purposes of the13
fraud unit, fraud support unit, insurance fraud section, LATIFPA, and as14
further provided in this Section. All unexpended and unencumbered monies in15
this fund at the end of the fiscal year shall be refunded to each insurer licensed16
by the Department of Insurance to conduct business in this state assessed a fee17
pursuant to this Section on a pro-rata basis based on each insurer's18
proportionate share of the total fees collected pursuant to this Section.19
* * *20
§1429. Effectiveness of Subpart21
This Subpart shall be null, void, and unenforceable on July 1, 2010 2012.22
Section 3. This Act shall become effective on July 1, 2010.23
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: