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)]
Pierre HB No. 543
Abstract: Provides relative to the regulation of surplus lines insurance, including authorizing
placement of insurance with a surplus lines insurer without regard to the availability of
authorized insurance.
Proposed law provides relative to the regulation of surplus lines insurance (property and casualty
insurance coverage procured from insurers that do not have certificates of authority to sell
insurance in this state), as follows:
(1)Present law provides that the placement of insurance coverage with a surplus lines insurer
(otherwise referred to as an approved unauthorized insurer or a non-admitted insurer)
through a surplus lines broker may occur only if such coverage is not available from an
authorized insurer (otherwise known as an admitted insurer).
Proposed law removes the requirement that insurance not be available from an authorized
insurer, thus authorizing placement of insurance with a surplus lines insurer without
regard to the availability of authorized insurance.
(2)Present law provides extensive eligibility requirements for surplus lines insurers,
including specific capital, surplus, bond, and deposit requirements.
Proposed law deletes many of these eligibility requirements in order to conform to the
federal Nonadmitted and Reinsurance Reform Act (NRRA) of 2010 which preempts
numerous state laws and regulations regarding surplus lines insurance. Establishes new
minimum capital and surplus requirements that conform to the NRRA for foreign surplus
lines insurers, specifically requiring that they have either the minimum capital and surplus
required in this state or $15 million. Gives the commissioner of insurance the discretion
to approve a surplus lines insurer with a smaller capital and surplus but at least $4.5
million upon a finding that the insurer is acceptable after considering factors listed in
proposed law. Further provides that alien insurers that are on the Quarterly Listing of
Alien Insurers maintained by the National Association of Insurance Commissioners
(NAIC) or that meet the requirements for foreign insurers may be approved by the
commissioner. Retains requirements for surplus lines brokers to submit reports and
information requested by the commissioner of insurance. Retains the ability to procure
certain high-dollar commercial policies from unauthorized insurers not on the approved
list when the commissioner approves of the specific transaction. (3)Present law requires that a list of surplus lines insurers be maintained by the
commissioner.
Proposed law retains this requirement but makes changes in the filing requirements for
such insurers. Makes such filing requirements less administratively burdensome by
eliminating certification of documents available through online systems for regulators
accessible to the Department of Insurance. Deletes provisions for mandatory removal
from the list for failure to timely file an annual statement. Consolidates the causes for
removal from the approved list and makes removal discretionary with the commissioner.
(4)Present law requires a submitting producer (agent) to submit an affidavit to the surplus
lines broker prior to obtaining surplus lines coverage affirming that the applicant for
insurance is not able to obtain authorized personal lines insurance after diligent efforts by
the producer. Also prescribes the content of the affidavit, including that in the event of
insolvency of the surplus lines insurer, losses shall not be paid by the La. Insurance
Guaranty Assn.
Proposed law eliminates the requirement for an affidavit for personal lines policies,
including the requirement that the applicant for insurance is not able to obtain authorized
personal lines insurance after diligent efforts by the producer. Instead requires that a
producer obtain written permission from the applicant for insurance, on a form
(certificate) approved by the commissioner, prior to obtaining surplus lines coverage.
Retains contents of the certificate, but adds including a statement that the applicant of
insurance expressly authorizes the procurement of surplus lines insurance coverage.
(5)Specifically provides that nothing in present law or proposed law shall apply to
contingent liability insurance in a rent with option-to purchase program.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 22:431, 432, 433, 435, 436, and 438)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Insurance to the original bill.
1. Limited requirement for a certificate to personal lines policies.
2. Changed references to "policyholder" to "applicant for insurance" in portion of
proposed law relative to the certificate for personal lines policies.
3. Added exemption for contingent liability insurance in a rent with option-to purchase
program.
House Floor Amendments to the engrossed bill. 1. Makes technical changes.