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Regular Session, 2011
HOUSE BILL NO. 635 (Substitute for House Bill No. 168 by Representative Thibaut)
BY REPRESENTATIVE THIBAUT
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
INSURANCE/AUTOMOBILE: Provides for notice to insureds relative to liability
insurance cancellation fees assessed by the office of motor vehicles
AN ACT1
To amend and reenact R.S. 32:861(A)(3), 863(A)(3)(a) and (B), and 863.2(A)(6), (E)(1), and2
(2) and to enact R.S. 22:885(E), relative to the cancellation of automobile insurance3
by the insured; to provide for notification by the office of motor vehicles to insureds4
relative to cancellation fees; to provide for the surrender of a vehicle's license plates5
upon cancellation of liability coverage; to limit the circumstances under which a6
vehicle owner will not be charged a fee upon cancellation of automobile liability7
coverage; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 22:885(E) is hereby enacted to read as follows: 10
§885. Cancellation by the insured; surrender11
* * *12
E. With respect to the cancellation of liability automobile insurance, the13
office of motor vehicles shall not assess the fees set forth by R.S. 32:863(A)(3)(a)14
when the insured surrenders the license plate of the uninsured vehicle to the office15
of motor vehicles within ten calendar days from the date of notice prescribed by R.S.16
32:863.2(E).17 HLS 11RS-1227 ENGROSSED
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Section 2. R.S. 32:861(A)(3), 863(A)(3)(a) and (B), and 863.2(A)(6), (E)(1), and (2)1
are hereby amended and reenacted to read as follows: 2
§861. Security required3
A.4
* * *5
(3) If the owner or lessee wishes to discontinue the use of a vehicle6
registered in his name, he shall surrender the vehicle's license plate to the secretary7
within ten calendar days of cancellation or, prior to the cancellation, he shall notify8
the secretary by written statement containing the date within ten calendar days of9
cancellation of liability security on the vehicle, that the vehicle is no longer in use10
and the intended period of nonuse, and shall have the agent who previously issued11
the policy of insurance on the vehicle submit an affidavit that the insurance on the12
vehicle has been will be cancelled during the period of time that the vehicle will not13
be in use. In the alternative, the owner or lessee may surrender the vehicle's license14
plate within such time period.15
* * *16
§863. Sanctions for false declaration; reinstatement fees; revocation of registration;17
review18
A.19
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(3)(a) Sanctions for a violation of Paragraph (1) of this Subsection shall be21
imposed until proof of required liability security is provided to the secretary and all22
reinstatement fees are paid. Sanctions for a violation of Paragraph (2) of this23
Subsection shall be imposed for a period of not less than six months nor more than24
eighteen months. However, in no event shall these sanctions be removed until such25
time as proof of the required security is provided to the secretary along with all26
appropriate fees required by law, including a reinstatement fee of twenty-five dollars27
per violation of Paragraph (1) of this Subsection if the vehicle was not covered by28
the required security for a period of eleven one to thirty days, one hundred dollars29 HLS 11RS-1227 ENGROSSED
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if the vehicle was not covered by required security for a period of thirty-one to ninety1
days, and two hundred dollars if the vehicle was not covered by required security for2
a period in excess of ninety days. No reinstatement fee shall be imposed by the3
secretary if the vehicle was not covered by required security for a period of ten days4
or less and the insured surrenders the vehicle's license plate to the secretary within5
ten days. The reinstatement fees for violations of Paragraph (2) of this Subsection6
shall be as follows: twenty-five dollars for a first violation, one hundred dollars for7
a second violation, and two hundred dollars for a third or subsequent violation,8
provided the offenses occurred within a five-year period. The reinstatement fee shall9
not be owed for an alleged violation of Paragraph (2) of this Subsection when proof10
of the required security is provided to the secretary. If at the time of reinstatement11
a person has multiple violations, the total amount of fees to be paid shall not exceed12
five hundred dollars, including any administrative fees for persons under sixty-five13
years old. At no time shall the total amount of fees, including any administrative14
fees, exceed two hundred dollars for persons sixty-five years or older.15
* * *16
B. The sanctions of Paragraph (A)(1) of Subsection A this Section shall not17
be imposed, and any fine, fee, or other monetary sanction which has been remitted18
to the secretary pursuant to the sanctions of this Section, specifically including any19
reinstatement fee paid pursuant to Paragraph (A)(3) of Subsection A this Section and20
any fee paid pursuant to Paragraph (D)(5) of Subsection C this Section, shall be21
promptly refunded by the secretary to the person who paid it, if the owner or lessee22
furnishes any of the following:23
(1) An original or photocopy of a Louisiana auto insurance identification24
card showing that the required security is in effect on the vehicle and has been25
continuous without lapse or an original or photocopy of any written communication26
from an insurer either to the insured or to the secretary stating that the required27
security is in effect on the vehicle and has been continuous without lapse, any one28 HLS 11RS-1227 ENGROSSED
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of which shall constitute sufficient evidence that the required security on the vehicle1
has not lapsed; or.2
(2) If such evidence is not furnished by the owner or lessee, any other3
evidence satisfactory to the secretary, that each of the following conditions are met:4
(a) The vehicle was at the time in question in fact covered by the required5
security or else has newly been covered by security as required by R.S. 32:8616
within ten calendar days after termination or cancellation of previous security; and.7
(b) The vehicle is currently covered by security as required by R.S. 32:861 ;8
and.9
(c) The vehicle was not involved in an accident during the period when it10
was not covered by security as required by R.S. 32:861 ; or.11
(3) Documentation satisfactory to the department that the vehicle was12
damaged as a result of a natural disaster which is the subject of a state of emergency13
declared by the governor and was treated as debris and removed, provided such14
natural disaster occurred prior to the reported cancellation of liability insurance.15
* * *16
§863.2. Notification of the cancellation or issuance of security; penalties; database17
development18
A.19
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(6) If any cancellation of a motor vehicle liability insurance policy occurs21
as a result of the recision rescission or other cancellation of the sale of the motor22
vehicle on which the policy is issued, the insurer shall notify the secretary of the23
cancellation and the circumstances of the cancellation, and the insured shall not be24
liable for any penalty or fee imposed for failure to maintain the security required by25
law.26
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E.(1) Prior to taking any administrative action based on the receipt of a28
notice of cancellation of insurance or other security, the secretary shall notify the29 HLS 11RS-1227 ENGROSSED
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person who is the subject of the notice at his last known driver's license address, of1
cancellation of the receipt of that notice. The notice of receipt of a notice of2
cancellation shall be in writing. The notice shall inform the subject that he has ten3
calendar days from the date of the notice in which he may surrender the license4
plates of the vehicle in order to avoid the fees prescribed by R.S. 32:863(A)(3)(a).5
The person to whom the notice is addressed shall have thirty days to respond to the6
notice. The response may be made by mail.7
(2) If the person to whom the notice is addressed is able to show that the8
insurance or other security was canceled for a legitimate reason, the secretary shall9
take no administrative action against that person. Legitimate reasons for cancellation10
of insurance or other security shall include but shall not be limited to the transfer of11
ownership of the vehicle or the surrender of the license plate of the formerly insured12
vehicle. If the vehicle is sold within ten calendar days after the date liability security13
on the vehicle was cancelled or its license plate is surrendered within ten calendar14
days of the date of notice sent pursuant to Paragraph (1) of this Subsection, no15
administrative action shall be taken. The transfer of ownership of the vehicle may16
be established by presenting to the secretary a copy of the title transfer or a copy of17
the act of sale, donation, exchange, surrender to a salvage yard, or other transaction.18
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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)]
Thibaut HB No. 635
Abstract: Requires the secretary of the office of motor vehicles, upon notification by an
insurer of a vehicle owner's cancellation of his vehicle's liability coverage, to send
a notice to the vehicle owner informing him that he has 10 calendar days from the
date of the notice to surrender the vehicle's license plate in order to avoid the fees
that are assessed by the office of motor vehicles when liability coverage lapses on
a vehicle.
Proposed law provides as follows: HLS 11RS-1227 ENGROSSED
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(1)Present law requires every registered motor vehicle in the state of La. to be covered
by (compulsory) automobile liability policy with certain limits. Upon cancellation
of this coverage, fees are assessed by the office of motor vehicles.
Proposed law provides that no fee will be assessed against a vehicle owner who
cancels the compulsory automobile liability policy if he turns in the vehicle's license
plate to the office of motor vehicles within 10 days of the date that the office of
motor vehicles sends him a notice.
(2)Present law provides that if the owner or lessee of a registered vehicle wishes to
discontinue use of the vehicle and cancel the insurance without being assessed the
fees by the office of motor vehicles, he shall send a written statement and affidavit
to the office of motor vehicles within 10 days of the cancellation, stating the intended
period of nonuse. The owner or lessee may also surrender the vehicle's license plates
to the office of motor vehicles within the same time period.
Proposed law requires that the owner or lessee of a registered vehicle send the
written statement and affidavit of nonuse prior to the cancellation of insurance;
otherwise retains present law.
(3)Present law provides for fees against a vehicle owner when the compulsory
automobile liability insurance cancels and is not reinstated by the eleventh day after
cancellation. The fees are assessed beginning at the eleventh day after cancellation
and are as follows: $25 if the vehicle is uninsured for a period of 11 to 30 days;
$100 if the vehicle is uninsured for a period of 31 to 90 days; and $200 if the vehicle
is uninsured for a period in excess of 90 days. No fee is charged when a vehicle has
been uninsured for a period of 10 days or less.
Proposed law changes present law by assessing the fee against a vehicle owner
beginning on the first day after cancellation, unless he surrenders the vehicle's
license plate to the office of motor vehicles within 10 days of notice from the office
of motor vehicles. If the license plate is not surrendered to the office of motor
vehicles and the vehicle is still in use, the $25 fee will be assessed when the vehicle
is uninsured for a period of one to 30 days. Otherwise retains present law.
(4)Present law requires the office of motor vehicles to notify any person whose
compulsory automobile liability insurance has cancelled before taking administrative
action.
Proposed law requires this notice to inform the subject that he has 10 calendar days
from the date of the notice to surrender the vehicle's license plates to the office of
motor vehicles in order to avoid the administrative fees.
(5)Present law provides that legitimate reasons for cancellation of compulsory liability
insurance include transfer of ownership of the vehicle.
Proposed law adds the surrender of the license plate as another legitimate reason for
cancellation. Otherwise retains present law.
(6)Proposed law makes technical changes.
(Amends R.S. 32:861(A)(3), 863(A)(3)(a) and (B), and 863.2(A)(6), (E)(1), and (2); Adds
R.S. 22:885(E))