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Regular Session, 2012
HOUSE RESOLUTION NO. 113
BY REPRESENTATIVE CROMER
INSURANCE DEPARTMENT: Urges and requests the La. Dept. of Insurance to withhold
enforcement of Advisory Letter No. 2010-01
A RESOLUTION1
To urge and request the Louisiana Department of Insurance to withhold enforcement of2
Advisory Letter 2010-01.3
WHEREAS, the Louisiana Department of Insurance issued Advisory Letter No.4
2010-01 on August 9, 2010; and5
WHEREAS, Advisory Letter No. 2010-01 affects all insurers, brokers, and producers6
doing business in the state of Louisiana; and7
WHEREAS, Advisory Letter No. 2010-01 is relative to insurance premiums that are8
quoted "net of commission"; and9
WHEREAS, there is significant material disagreement among interested insurance10
producers, insurers, large employer groups, and local government entities relative to the11
validity and interpretation of the advisory letter and the implications it may have on the12
insurance industry in the state of Louisiana; and13
WHEREAS, the effect of Advisory Letter No. 2010-01 will alter the existing14
business practices of interested parties; and15
WHEREAS, the Patient Protection and Affordable Care Act was signed into law by16
the president of the United States on March 23, 2010; and17
WHEREAS, the Patient Protection and Affordable Care Act mandates health insurers18
to meet certain standards relative to Medical Loss Ratios; and19
WHEREAS, the calculation of Medical Loss Ratios is impacted by whether or not20
sales of insurance products may be sold "net of commission"; and21 HLS 12RS-4442 ORIGINAL
HR NO. 113
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WHEREAS, the interpretation of Advisory Letter No. 2010-01 will directly affect1
whether or not insurance products may be sold "net of commission" in the state of Louisiana;2
and3
WHEREAS, the conflicting interpretations of Advisory Letter No. 2010-01 may4
unreasonably complicate implementation of the provisions of the Patient Protection and5
Affordable Care Act relative to the determination of Medical Loss Ratios; and6
WHEREAS, federal law preempts state law; and7
WHEREAS, House Bills Nos. 869 and 1031 were filed in the 2012 Regular Session8
of the Legislature in an effort to quell the confusion and remedy the controversy surrounding9
Advisory Letter 2010-01; and10
WHEREAS, the interested parties have been unable to reach an agreement, even in11
light of House Bills Nos. 869 and 1031 of the 2012 Regular Session of the Legislature; and12
WHEREAS, all interested parties have agreed to meet and work together in good13
faith to compromise on legislation, relative to insurance premium quotes that are made "net14
of commission", to be filed in the 2013 Regular Session of the Legislature of Louisiana; and15
WHEREAS, it is necessary that Advisory Letter 2010-01 is interpreted in such a way16
that is most beneficial to consumers; and17
WHEREAS, it is integral to the future of the insurance industry in the state of18
Louisiana that Advisory Letter 2010-01 is interpreted in such a way that does not present an19
undue burden to interested parties; and20
WHEREAS, a premature implementation of Advisory Letter 2010-01 could result21
in an interpretation which conflicts with the federal Patient Protection and Affordable Care22
Act; and 23
WHEREAS, such a conflict between state and federal law would be a violation of24
Article VI, Clause 2 of the United States Constitution; and 25
WHEREAS, it is important to ensure that state law is in conformity with the needs26
of the insurance industry and its consumers, as well as federal law; and27
WHEREAS, it would serve the betterment of all interested parties, as well as28
Louisiana consumers, for the Louisiana Department of Insurance to withhold enforcement29
of Advisory Letter 2010-01 until such time as the interested parties have had time to reach30 HLS 12RS-4442 ORIGINAL
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a compromise and the result of such compromise has been considered by the Louisiana1
House of Representatives and Senate, respectively. 2
THEREFORE, BE IT RESOLVED that the House of Representatives of the3
Legislature of Louisiana does hereby urge and request the Louisiana Department of4
Insurance to withhold enforcement of Advisory Letter No. 2010-01 until the final5
adjournment of the 2013 Regular Session of the Legislature of Louisiana.6
BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the7
commissioner of the Department of Insurance.8
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)]
Cromer HR No. 113
Urges and requests the La. Dept. of Insurance to withhold enforcement of Advisory Letter
No. 2010-01, relative to insurance premiums quoted "net of commission", until the final
adjournment of the 2013 R.S.