HLS 12RS-517 ORIGINAL
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Regular Session, 2012
HOUSE BILL NO. 154
BY REPRESENTATIVE THIBAUT
INSURANCE/POLICIES: Provides relative to policy refunds
AN ACT1
To amend and reenact R.S. 22:1268(A)(introductory paragraph) and (2) and 1287, relative2
to policy refunds and interest; to provide for the crediting of refund amounts against3
future premiums; to provide for the accrual of interest on refunds; and to provide for4
related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 22:1268(A)(introductory paragraph) and (2) and 1287 are hereby7
amended and reenacted to read as follows: 8
§1268. Interest on refund; exception9
A. Any refund due an insured by an insurer writing or delivering insurance10
policies excluding health insurance, life insurance, and annuities in the state because11
of either cancellation, elimination, or reduction of coverage by the insurer or the12
insured, shall be accompanied with interest at the rate of one and one-half percent13
per month of the amount of the refund due the customer, without the benefit of daily14
proration of this monthly interest, after thirty sixty days of either of the following:15
* * *16
(2) Delivery to the insurer's state, regional, or home office, from which such17
refund would issue, of the written request for such cancellation, elimination, or18
reduction. An insurer shall be deemed in compliance with this Section and not19
subject to the further accruement of interest by furnishing timely evidence of the20 HLS 12RS-517 ORIGINAL
HB NO. 154
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mailing of such refund to the last known address of the insured. However, when the1
insured continues to maintain a policy of insurance with the insurer, or an affiliated2
insurer, and the amount of the refund plus interest is twenty-five dollars or less, the3
insurer may credit the amount of the payment against future premiums. The insurer4
shall give written notice to the insured of the credit and the amount at policy renewal.5
* * *6
§1287. Overpayments; surplus premium; endorsement credits7
All automobile insurers shall as soon as reasonably possible, but in no event8
later than thirty sixty days, pay to the premium finance company, if the premium has9
been financed or if not financed, to the insured, or the person entitled thereto as10
shown by the automobile insurer's records any overpayment or surplus and11
commission paid or due on the policy. The failure to pay the person owed the money12
within the thirty sixty-day period shall entitle that person to recover monetary13
penalties and interest. In the event the insured is due a credit from an endorsement14
or change to the policy, the return premium and commission shall be computed on15
a pro rata basis. However, when the insured continues to maintain a policy of16
insurance with the insurer, or an affiliated insurer, and the amount of the refund plus17
interest is twenty-five dollars or less, the insurer may credit the amount of the18
payment against future premiums. The insurer shall give written notice to the19
insured of the credit and the amount at policy renewal.20
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. 154
Abstract: Provides that an insurer may apply an overpayment of an insurance premium
toward future premiums as long as the overpayment, plus interest, equals $25 or less.
Present law provides that any refund due to an insured by an insurer because of cancellation,
elimination, or reduction of coverage shall be returned with interest at the rate of 1.1% per
month, which shall begin to accrue either 30 days after the insured's letter of cancellation,
elimination, or reduction to the insurer or delivery of the request for such a refund. Present
law is not applicable to health insurance, life insurance, or annuities. HLS 12RS-517 ORIGINAL
HB NO. 154
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are additions.
Proposed law changes the time period which triggers an insured's refund to begin to accrue
interest at a rate of 1.1% per month from 30 days to 60 days after the insured's letter of
cancellation, elimination, or reduction to the insurer or delivery of the request for such a
refund.
Proposed law provides that if a refund of $25 or less, including interest, is due to an insured
who continues to maintain a policy of insurance with the insurer or an affiliated insurer, that
the insurer may apply the refund to the insured's next premium in the form of a credit.
Proposed law requires that the insurer give written notice of the credit amount to the insured
upon policy renewal.
(Amends R.S. 22:1268(A)(intro. para.) and (2) and 1287)