HLS 12RS-517 ENGROSSED
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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)(2) and 1287, relative to policy refunds and interest;2
to provide for the crediting of refund amounts against future premiums; to provide3
for the accrual of interest on refunds; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 22:1268(A)(2) and 1287 are hereby amended and reenacted to read6
as follows: 7
§1268. Interest on refund; exception8
A. Any refund due an insured by an insurer writing or delivering insurance9
policies excluding health insurance, life insurance, and annuities in the state because10
of either cancellation, elimination, or reduction of coverage by the insurer or the11
insured, shall be accompanied with interest at the rate of one and one-half percent12
per month of the amount of the refund due the customer, without the benefit of daily13
proration of this monthly interest, after thirty days of either of the following:14
* * *15
(2) Delivery to the insurer's state, regional, or home office, from which such16
refund would issue, of the written request for such cancellation, elimination, or17
reduction. An insurer shall be deemed in compliance with this Section and not18
subject to the further accruement of interest by furnishing timely evidence of the19
mailing of such refund to the last known address of the insured. However, when the20 HLS 12RS-517 ENGROSSED
HB NO. 154
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insured continues to maintain a policy of insurance with the insurer, or an affiliated1
insurer, and the amount of the refund plus interest is twenty-five dollars or less, the2
insurer may credit the amount of the payment against future premiums. The insurer3
shall give written notice to the insured of the credit and the amount at policy renewal.4
* * *5
§1287. Overpayments; surplus premium; endorsement credits6
All automobile insurers shall as soon as reasonably possible, but in no event7
later than thirty sixty days, pay to the premium finance company, if the premium has8
been financed or if not financed, to the insured, or the person entitled thereto as9
shown by the automobile insurer's records any overpayment or surplus and10
commission paid or due on the policy. The failure to pay the person owed the money11
within the thirty thirty-day period shall entitle that person to recover monetary12
penalties and interest. In the event the insured is due a credit from an endorsement13
or change to the policy, the return premium and commission shall be computed on14
a pro rata basis. However, when the insured continues to maintain a policy of15
insurance with the insurer, or an affiliated insurer, and the amount of the refund plus16
interest is twenty-five dollars or less, the insurer may credit the amount of the17
payment against future premiums. The insurer shall give written notice to the18
insured of the credit and the amount at policy renewal.19
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 ENGROSSED
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are additions.
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)(2) and 1287)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Insurance to the original
bill.
1. Made technical changes.
2. Changed back to present law the applicable time period at which interest will
begin to accrue from 60 days to 30 days.