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Regular Session, 2011
HOUSE RESOLUTION NO. 115
BY REPRESENTATIVE CORTEZ
INSURANCE/LIABILITY: Urges and requests the Dept. of Insurance and the La. Used
Motor Vehicle Commission to jointly study whether there is a need for mandated
contingent liability coverage for rental dealers and whether an adequate market for
such insurance exists in this state
A RESOLUTION1
To urge and request the Department of Insurance and the Louisiana Used Motor Vehicle2
Commission to jointly study whether there is a need for mandated contingent3
liability coverage for rental dealers and whether an adequate market for such4
insurance exists in this state and to report their findings to the House Insurance5
Committee prior to the convening of the 2012 Regular Session of the Legislature of6
Louisiana.7
WHEREAS, Louisiana law, R.S. 32:793(D), requires rental dealers to maintain8
contingent automobile liability policy of insurance with minimum limits of one hundred9
thousand dollars per occurrence, three hundred thousand dollars aggregate, and fifty10
thousand dollars in property damage; and11
WHEREAS, the cost of such a contingent automobile liability policy has become12
prohibitive for rental dealers, particularly because this same law requires that such coverage13
be obtained from admitted insurance carriers, if available, and insurers which offer this type14
of coverage are very limited in number; and 15
WHEREAS, the market for such mandated coverage might be greatly expanded by16
allowing rental dealers to obtain this coverage from surplus lines insurance carriers with17
excellent ratings without exposing dealers or their customers to increased risk; and 18
WHEREAS, motor vehicle lessors, those who lease cars without the rent-to-own19
option, are not required to maintain similar contingent liability coverage but are only20 HLS 11RS-3331 ORIGINAL
HR NO. 115
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required by Louisiana law, R.S. 32:1254(J)(5), to maintain insurance coverage covering their1
place of business and their operations that comply with the financial responsibility law of2
this state and as determined by the dealer and his insurance agent; and3
WHEREAS, the issue of mandated coverage for rental dealers as required by4
Louisiana law has not been revisited since passage of the Safe, Accountable, Flexible,5
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which contained6
the Graves Amendment, by the United States Congress in 2005; and 7
WHEREAS, the Graves Amendment abolishes vicarious liability of companies that8
rent or lease motor vehicles based on the negligent driving of their customers "if there is no9
negligence or criminal wrongdoing on the part of the owner [that rents or leases vehicles]";10
and11
WHEREAS, such federal legislation may have the effect of preempting state laws12
that impose such liability on motor vehicle renting and leasing companies; and 13
WHEREAS, the Department of Insurance has the authority to regulate the business14
of insurance in this state and the Louisiana Used Motor Vehicle Commission is authorized15
to regulate Louisiana rental dealers.16
THEREFORE, BE IT RESOLVED that the House of Representatives of the17
Legislature of Louisiana does hereby urge and request the Department of Insurance and the18
Louisiana Used Motor Vehicle Commission to jointly study whether there is a need for19
mandated contingent liability coverage for rental dealers and whether an adequate market20
for such insurance exists in this state.21
BE IT FURTHER RESOLVED that the Department of Insurance and the Louisiana22
Used Motor Vehicle Commission jointly report their findings to the House Insurance23
Committee before convening of the 2012 Regular Session of the Legislature of Louisiana.24
BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the25
commissioner of insurance and the executive director of the Louisiana Used Motor Vehicle26
Commission. 27 HLS 11RS-3331 ORIGINAL
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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)]
Cortez HR No. 115
Urges and requests the Dept. of Insurance and the La. Used Motor Vehicle Commission to
jointly study whether there is a need for mandated contingent liability coverage for rental
dealers and whether a market for such insurance exists in this state. Further requires such
entities to jointly report their findings to the House Insurance Committee before convening
of the 2012 R.S.