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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, 2011
SENATE BILL NO. 84
BY SENATOR MORRISH
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
INSURANCE PREMIUMS. Provides for the calculation of unearned premium in the event
of cancellation by the insured. (8/15/11)
AN ACT1
To amend and reenact R.S. 22:885(B), relative to cancellation by the insured; to provide for2
the calculation of any unearned premium to be returned to the insured; to authorize3
calculating the unearned premium based on a short-rate provision contained in the4
policy filed with and approved by the commissioner; and to provide for related5
matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:885(B) is hereby amended and reenacted to read as follows: 8
ยง885. Cancellation by the insured; surrender9
* * *10
B. Within thirty days following such cancellation the insurer shall pay to the11
insured or to the person entitled thereto as shown by the insurer's records, any12
unearned portion of any premium paid on the policy as computed on the customary13
pro rata rate, or as unless otherwise specified stated in the a policy that has been14
filed with and approved by the commissioner, and any unearned commission. In15
the event a personal line or commercial line insurance policy is canceled, any16
unearned premium and commission shall be computed on a pro rata basis. If no17 SB NO. 84
SLS 11RS-242 ENGROSSED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
premium has been paid on the policy, the insured shall be liable to the insurer for1
premium for the period during which the policy was in force. Except for surplus line2
insurers, any assessment of a monetary penalty by an insurer against an insured as3
a result of the insured's cancellation prior to the expiration of any policy is4
prohibited. Nothing in this Section shall prohibit an insurer from calculating5
unearned premium based on a short-rate provision contained in any insurance6
policy that has been filed with and approved by the commissioner.7
* * *8
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Morrish (SB 84)
Present law provides for cancellation by the insured of any policy or binder upon written
notice to the insurer and surrender of the policy or binder prior to or on the effective date of
such cancellation. Requires that within 30 days following such cancellation the insurer pay
to the insured or to the person entitled thereto, any unearned portion of any premium paid
on the policy as computed on the customary pro rata rate or as otherwise specified in the
policy.
Proposed law retains present law but provides the payment of unearned premium be paid as
computed on the customary pro rata rate unless otherwise stated in a policy filed with and
approved by the commissioner.
Present law provides that in the event a personal line or commercial line insurance policy
is canceled, any unearned premium and commission shall be computed on a pro rata basis.
Proposed law deletes present law.
Present law provides that if no premium has been paid on the policy, the insured shall be
liable to the insurer for premium for the period during which the policy was in force.
Provides that except for surplus line insurers, any assessment of a monetary penalty by an
insurer against an insured as a result of the insured's cancellation prior to the expiration of
any policy is prohibited.
Proposed law retains present law and adds provisions that nothing in present law shall
prohibit an insurer from calculating unearned premium based on a short-rate provision
contained in any insurance policy that has been filed with and approved by the
commissioner.
Effective August 15, 2011.
(Amends R.S. 22:885(B)) SB NO. 84
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original
bill.
1. Requires a policy to be filed and approved by the commissioner.