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ACT No. 370
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.
AN ACT1
To amend and reenact R.S. 32:861(A)(3), 863(A)(3)(a) and (B), and 863.2 (A)(1), (2), and2
(6), (B), (E)(1) and (2) and to enact R.S. 22:885(E), relative to the cancellation of3
automobile insurance by the insured; to provide for notification by the office of4
motor vehicles to insureds relative to cancellation fees; to provide for the surrender5
of a vehicle's license plates upon cancellation of liability coverage; to limit the6
circumstances under which a vehicle owner will not be charged a fee upon7
cancellation of automobile liability 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
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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
Section 2. R.S. 32:861(A)(3), 863(A)(3)(a) and (B), and 863.2(A)(1), (2), and (6),18
(B), (E)(1) and (2) are hereby amended and reenacted to read as follows: 19 ENROLLEDHB NO. 635
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§861. Security required1
A.2
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(3) If the owner or lessee wishes to discontinue the use of a vehicle4
registered in his name, he shall surrender the vehicle's license plate to the secretary5
within ten calendar days of cancellation or, prior to the cancellation, he shall notify6
the secretary by written statement containing the date within ten calendar days of7
cancellation of liability security on the vehicle, that the vehicle is no longer in use8
and the intended period of nonuse, and shall have the agent who previously issued9
the policy of insurance on the vehicle submit an affidavit that the insurance on the10
vehicle has been will be cancelled during the period of time that the vehicle will not11
be in use. In the alternative, the owner or lessee may surrender the vehicle's license12
plate within such time period.13
* * *14
§863. Sanctions for false declaration; reinstatement fees; revocation of registration;15
review16
A.17
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(3)(a) Sanctions for a violation of Paragraph (1) of this Subsection shall be19
imposed until proof of required liability security is provided to the secretary and all20
reinstatement fees are paid. Sanctions for a violation of Paragraph (2) of this21
Subsection shall be imposed for a period of not less than six months nor more than22
eighteen months. However, in no event shall these sanctions be removed until such23
time as proof of the required security is provided to the secretary along with all24
appropriate fees required by law, including a reinstatement fee of twenty-five dollars25
per violation of Paragraph (1) of this Subsection if the vehicle was not covered by26
the required security for a period of eleven one to thirty days, one hundred dollars27
if the vehicle was not covered by required security for a period of thirty-one to ninety28
days, and two hundred dollars if the vehicle was not covered by required security for29
a period in excess of ninety days. No reinstatement fee shall be imposed by the30 ENROLLEDHB NO. 635
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secretary if the vehicle was not covered by required security for a period of ten days1
or less and the insured surrenders the vehicle's license plate to the secretary within2
ten days. The reinstatement fees for violations of Paragraph (2) of this Subsection3
shall be as follows: twenty-five dollars for a first violation, one hundred dollars for4
a second violation, and two hundred dollars for a third or subsequent violation,5
provided the offenses occurred within a five-year period. The reinstatement fee shall6
not be owed for an alleged violation of Paragraph (2) of this Subsection when proof7
of the required security is provided to the secretary. If at the time of reinstatement8
a person has multiple violations, the total amount of fees to be paid shall not exceed9
five hundred dollars, including any administrative fees for persons under sixty-five10
years old. At no time shall the total amount of fees, including any administrative11
fees, exceed two hundred dollars for persons sixty-five years or older.12
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B. The sanctions of Paragraph (A)(1) of Subsection A this Section shall not14
be imposed, and any fine, fee, or other monetary sanction which has been remitted15
to the secretary pursuant to the sanctions of this Section, specifically including any16
reinstatement fee paid pursuant to Paragraph (A)(3) of Subsection A this Section and17
any fee paid pursuant to Paragraph (D)(5) of Subsection C this Section, shall be18
promptly refunded by the secretary to the person who paid it, if the owner or lessee19
furnishes any of the following:20
(1) An original or photocopy of a Louisiana auto insurance identification21
card showing that the required security is in effect on the vehicle and has been22
continuous without lapse or an original or photocopy of any written communication23
from an insurer either to the insured or to the secretary stating that the required24
security is in effect on the vehicle and has been continuous without lapse, any one25
of which shall constitute sufficient evidence that the required security on the vehicle26
has not lapsed; or.27
(2) If such evidence is not furnished by the owner or lessee, any other28
evidence satisfactory to the secretary, that each of the following conditions are met:29 ENROLLEDHB NO. 635
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(a) The vehicle was at the time in question in fact covered by the required1
security or else has newly been covered by security as required by R.S. 32:8612
within ten calendar days after termination or cancellation of previous security; and.3
(b) The vehicle is currently covered by security as required by R.S. 32:861 ;4
and.5
(c) The vehicle was not involved in an accident during the period when it6
was not covered by security as required by R.S. 32:861 ; or.7
(3) Documentation satisfactory to the department that the vehicle was8
damaged as a result of a natural disaster which is the subject of a state of emergency9
declared by the governor and was treated as debris and removed, provided such10
natural disaster occurred prior to the reported cancellation of liability insurance.11
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§863.2. Notification of the cancellation or issuance of security; penalties; database13
development14
A.(1) All entities providing security in compliance with R.S. 32:861 et seq.,15
hereinafter referred to as "security providers", whether admitted or nonadmitted16
(surplus line underwriter) insurance companies providing automobile liability17
policies, or sales representatives or agents of surety companies issuing motor vehicle18
liability bonds, or the state treasurer holding deposits, shall notify the secretary of the19
effective dates of each liability policy, liability bond, deposit, or other security within20
fifteen business days from the date that notice of such policy, bond, deposit, or other21
security was issued by the security provider. or made.22
(2) Except as otherwise provided for motor carriers in R.S. 32:900(M), in23
addition, all such security providers shall notify the secretary when any policy, bond,24
deposit, or other item of security is terminated, withdrawn, canceled, lapsed, or25
otherwise made ineffective within fifteen business days of from the date that notice26
of the security became becoming ineffective was issued by the security provider.27
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(6) If any cancellation of a motor vehicle liability insurance policy occurs29
as a result of the recision rescission or other cancellation of the sale of the motor30 ENROLLEDHB NO. 635
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vehicle on which the policy is issued, the insurer shall notify the secretary of the1
cancellation and the circumstances of the cancellation, and the insured shall not be2
liable for any penalty or fee imposed for failure to maintain the security required by3
law.4
B. Upon failure of When a security provider to does not provide the5
secretary with the information required by this Section within the time limits set6
forth in this Section, the insurance company, sales representative or agent, state7
treasurer, or other provider shall pay be assessed a late fee of not more than fifty8
dollars per policy, bond, or deposit, or other security item concerning which9
information is not supplied. All fees collected under this Subsection shall be10
deposited in the Bond Security and Redemption Fund as provided in R.S.11
32:853(B)(2).12
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E.(1) Prior to taking any administrative action based on the receipt of a14
notice of cancellation of insurance or other security, the secretary shall notify the15
person who is the subject of the notice at his last known driver's license address, of16
cancellation of the receipt of that notice. The notice of receipt of a notice of17
cancellation shall be in writing. The notice shall inform the subject that he has ten18
calendar days from the date of the notice in which he may surrender the license19
plates of the vehicle in order to avoid the fees prescribed by R.S. 32:863(A)(3)(a).20
The person to whom the notice is addressed shall have thirty days to respond to the21
notice. The response may be made by mail.22
(2) If the person to whom the notice is addressed is able to show that the23
insurance or other security was canceled for a legitimate reason, the secretary shall24
take no administrative action against that person. Legitimate reasons for cancellation25
of insurance or other security shall include but shall not be limited to the transfer of26
ownership of the vehicle or the surrender of the license plate of the formerly insured27
vehicle. If the vehicle is sold within ten calendar days after the date liability security28
on the vehicle was cancelled or its license plate is surrendered within ten calendar29
days of the date of notice sent pursuant to Paragraph (1) of this Subsection, no30 ENROLLEDHB NO. 635
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administrative action shall be taken. The transfer of ownership of the vehicle may1
be established by presenting to the secretary a copy of the title transfer or a copy of2
the act of sale, donation, exchange, surrender to a salvage yard, or other transaction.3
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SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: