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Regular Session, 2013
SENATE BILL NO. 180
BY SENATORS ERDEY AND LAFLEUR
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
INSURANCE DEPARTMENT. Provides relative to the division of insurance fraud in the
Department of Insurance. (8/1/13)
AN ACT1
To amend and reenact R.S. 22:3, 1921, 1922, 1926, 1927, 1928(A) introductory paragraph2
and 1929(A), and R.S. 36:681(C)(1), to enact R.S. 36:691.1, and to repeal R.S.3
36:691, relative to the Department of Insurance; to provide with respect to the4
division of insurance fraud; to provide for powers and duties of the division of5
insurance fraud; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:3, 1921, 1922, 1926, 1927, 1928(A) introductory paragraph, and8
1929(A) are hereby amended and reenacted to read as follows:9
§3. Composition of Department of Insurance10
The Department of Insurance shall be comprised of the office of the11
commissioner, the office of management and finance, the office of property and12
casualty, the office of receivership, the office of licensing and compliance, the office13
of financial solvency, the office of consumer advocacy, the office of health14
insurance, the division of insurance fraud, the division of legal services, the15
division of public affairs, the division of minority affairs, and any other office or16
division that may be included by the Executive Reorganization Act or other law.17 SB NO. 180
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Each office or division shall be administered as prescribed by Titles 36 and 39 of the1
Louisiana Revised Statutes of 1950.2
* * *3
§1921. Purpose and powers4
A. The purpose of this Part is to create within the Department of Insurance5
a section division of insurance fraud. This section division shall be charged with the6
responsibility, when requested directed by the commissioner of insurance, to7
conduct investigations and background criminal checks on all applicants each8
applicant for a license or certificate of authority to transact a business of insurance.9
The division of insurance fraud shall be governed by the provisions of this Part10
including the powers and duties relating to the investigation, prosecution, and11
prevention of violations of the insurance laws of this state.12
B. In the event the applicant is a corporation, partnership, or other legal13
entity, the criminal background and checks shall be limited to those individuals who14
are directors, officers, employees, or individuals who own or control at least ten15
percent of the entity.16
C. If the section division has reason to believe, whether acting on its own17
initiative or as a result of complaints, that a person has engaged in, or is engaging in,18
an act or practice that violates this Part or any other provision of this Code, it may19
examine and investigate into the affairs of such person and may administer oaths and20
affirmations, serve subpoenas ordering the attendance of witnesses, and collect21
evidence.22
D. If during the course of investigation, the Department of Insurance23
division of insurance fraud determines that there may be a violation of any criminal24
law, the investigation the division shall then be turned over to coordinate further25
actions with the Department of Justice, the Department of Public Safety and26
Corrections, public safety services, office of state police, and any other appropriate27
law enforcement or prosecutorial agency, for further investigation, enforcement, or28
prosecution.29 SB NO. 180
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§1922. Additional powers and duties1
A. The Department of Insurance, section division of insurance fraud, is2
hereby designated as a law enforcement agency and conferred all investigative3
powers and privileges appurtenant to a law enforcement agency under state law4
as necessary and in furtherance of the authority, duties, powers, and functions5
set forth in this Part. These powers and privileges shall include arrest powers6
related to insurance fraud, as provided in Subsections D and E of this Section,7
and access to computer systems, information maintained for the use of law8
enforcement personnel, any information contained in the criminal history9
record and identification file of the Louisiana Bureau of Criminal Identification10
and Information, is authorized to have and direct access to information compiled11
by the Federal Bureau of Investigation, as contained in the National Crime12
Identification Center for the purposes of licensure or the granting, denying,13
revocation, suspension or any other action on an application for a license or14
certificate of authority to be an insurer in the state, subject to the approval of the15
office of state police carrying out its responsibilities under this Part.16
B. The Department of Insurance, section of insurance fraud, commissioner17
of insurance is authorized to may require all applicants each applicant for a license18
or certificate of authority to submit physical evidence of the identity of the applicant.19
The commissioner of insurance is authorized to may promulgate rules and20
regulations defining the type of physical identification acceptable and the manner in21
which such evidence is to be received by the Department of Insurance.22
C. The commissioner of insurance may deny a license or certificate of23
authority when the applicant, or if the applicant is a corporation, partnership, limited24
liability company or partnership, or other legal entity, any officer, director, managing25
person, employee, or principal stockholder has been convicted of a felony.26
D. The deputy commissioner of insurance fraud and the compliance27
investigators of the insurance fraud division shall be peace officers with all28
privileges, immunities, and defenses accorded to peace officers. In addition, the29 SB NO. 180
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deputy commissioner and each compliance investigator, while engaged in the1
performance of their duties to investigate insurance fraud, shall have the2
authority to investigate and cause the arrest of individuals suspected of having3
violated the following criminal laws:4
(1) R.S. 22:184, violations relating to reciprocal insurers.5
(2) R.S. 22:216, violations relating to nonprofit funeral service6
associations.7
(3) R.S. 22:316, violations relating to fraternal benefit societies.8
(4) R.S. 22:987, violations relating to standards and contract9
requirements for health and accident policies.10
(5) R.S. 22:1562, prohibited acts relating to procuring surplus lines11
insurance.12
(6) R.S. 22:1584, prohibited acts relating to bail bond producers.13
(7) R.S. 22:1924 and 1925, committing insurance fraud.14
(8) R.S. 22:2007, failure of officers, owners, and employees to cooperate15
in an investigation.16
(9) Any other criminal laws making unlawful an attempt or conspiracy17
to commit the foregoing offenses.18
E. The commissioner of insurance may issue a commission authorizing19
any deputy commissioner of insurance fraud or any compliance investigator20
who is P.O.S.T.-certified to carry and use firearms and to arrest persons21
suspected of violating the crimes enumerated in this Section. The commissioner22
shall also provide appropriate credentials and badges of authority.23
* * *24
§1926. Duties of companies and others25
A. Any person, company, or other legal entity including but not limited to26
those engaged in the business of insurance, including producers and adjusters, which27
that suspects that a fraudulent insurance act will be, is being, or has been committed28
shall, within sixty days of the receipt of such notice, send to the section division of29 SB NO. 180
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insurance fraud, on a form prescribed by the section commissioner, the information1
requested and such additional information relative to the insurance act and the parties2
claiming loss or damages because of an occurrence or accident as the section3
commissioner may require. The section division of insurance fraud shall review4
such reports and select such insurance acts as, in its judgment, may require further5
investigation. It shall then cause an independent examination of the facts surrounding6
such insurance act to be made to determine the extent, if any, to which fraud, deceit,7
or intentional misrepresentation of any kind exists in the submission of the insurance8
act.9
B. The section division of insurance fraud shall report any alleged violations10
of law which its investigations disclose to the appropriate licensing agency, the11
insurance fraud investigation unit of the office of state police, the insurance fraud12
support unit of the Department of Justice, and the prosecutive authority having13
jurisdiction with respect to any such violation. These units shall work jointly on14
criminal referrals.15
§1927. Materials and evidence16
A. If matter that the section division seeks to obtain by request is located17
outside the state, the person so requested may make it available to the section18
division or its representative to examine at the place where it is located. The section19
division may designate representatives, including officials of the state in which the20
matter is located, to inspect the matter on its behalf, and it may respond to similar21
requests from officials of other states.22
B. The section's division's papers, documents, reports, or evidence relative23
to the subject of an investigation under this Part shall not be subject to public24
inspection for so long as the section commissioner deems reasonably necessary to25
complete the investigation, to protect the person investigated from unwarranted26
injury, or to be in the public domain. Further, such papers, documents, reports, or27
evidence relative to the subject of investigation under this Section shall not be28
subject to subpoena until opened for public inspection by the section commissioner,29
unless the section commissioner consents, or until after notice to the section30 SB NO. 180
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commissioner and a hearing, a court of competent jurisdiction determines the1
section division would not be necessarily hindered by such subpoena. Section2
investigators Division personnel shall not be subject to subpoena in civil actions by3
any court of this state to testify concerning any matter of which they have knowledge4
pursuant to a pending insurance fraud investigation by the section.5
§1928. Civil immunity6
A. No insurer, employees, or agents of any insurer, or any other person acting7
without malice, fraudulent intent, or bad faith, shall be subject to civil liability for8
libel, slander, or any other relevant tort, and no civil cause of action of any nature9
shall exist against such person or entity by virtue of the filing of reports or furnishing10
other information, either orally or in writing, concerning suspected, anticipated, or11
completed fraudulent insurance acts when such reports or information are required12
by this Part or required by the section division of insurance fraud as a result of the13
authority herein granted or when such reports or information are provided to or14
received from:15
* * *16
§1929. Confidentiality of criminal background checks, civil penalties17
A. Notwithstanding any other provision of law to the contrary, criminal18
background information in the possession of the fraud section insurance fraud19
division of the Department of Insurance shall be confidential and shall not be20
disclosed to others outside of the fraud section insurance fraud division except as21
necessary for action on the application of the applicant.22
* * *23
Section 2. R.S. 36:681(C)(1) is hereby amended and reenacted and R.S. 36:691.1 is24
hereby enacted to read as follows:25
§681. Department of Insurance; creation; domicile; purposes and functions26
* * *27
C.(1) The officers of the department shall be the commissioner of insurance,28
the chief deputy commissioner, the deputy commissioner for management and29
finance, the deputy commissioner for property and casualty, the deputy30 SB NO. 180
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commissioner for receivership insurance fraud, the deputy commissioner for1
licensing and compliance, the deputy commissioner for financial solvency, the2
deputy commissioner for health insurance, the deputy commissioner for public3
affairs, the deputy commissioner for minority affairs, the deputy commissioner for4
consumer advocacy, and the executive counsel.5
* * *6
§691.1. Division of insurance fraud7
There is hereby created a division of insurance fraud in the Department8
of Insurance that shall be under the direction of the deputy commissioner for9
insurance fraud. The duties and functions of the division of insurance fraud10
and the deputy commissioner of insurance fraud shall be the investigation of11
alleged fraudulent insurance acts and other violations of the insurance laws of12
this state, executive security, and assigned by the commissioner.13
Section 3. R.S. 36:691 is hereby repealed.14
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Present law provides for a section of insurance fraud within the Dept of Insurance with the
responsibility to conduct investigations and criminal background checks on all applicants
for licenses or certificates of authority to transact a business of insurance.
Proposed law creates a division of insurance fraud and a deputy commissioner of insurance
fraud within the Dept. of Insurance with the responsibilities provided in present law for the
insurance fraud section and adds certain powers and duties as they relate to the investigation,
prosecution, and prevention of violations of La. insurance laws.
Present law provides that if, during the course of investigation, the Dept. of Insurance
determines that there may be a violation of any criminal law, the investigation shall be
turned over to the Dept. of Justice, the Dept. of Public Safety and Corrections, public safety
services, office of state police, and any other appropriate law enforcement or prosecutorial
agency for further investigation, enforcement, or prosecution.
Proposed law provides that if the division of insurance fraud determines that there may be
a violation of any criminal law, the division shall then coordinate further actions with the
agencies in present law.
Proposed law creates the division of insurance fraud as a law enforcement agency and
confers all investigative powers and privileges appurtenant to a law enforcement agency
under state law as necessary in furtherance of the authority, duties, powers and functions of
the division. Provides that the powers and privileges shall include arrest powers related to
insurance fraud, access to computer systems, information maintained for the use of law
enforcement personnel, any information contained in the criminal history record and SB NO. 180
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identification file of the La. Bureau of Criminal Identification and Information as well as
direct access to information complied by the Federal Bureau of Investigation for the
purposes of carrying out the division's responsibilities.
Proposed law requires the deputy commissioner of insurance fraud and all compliance
investigators of the insurance fraud division to be peace officers with all privileges,
immunities, and defenses accorded to peace officers, including the authority to investigate
insurance fraud cases and cause the arrest of individuals suspected of having violated
insurance fraud as defined in present law. Permits the commissioner of insurance to issue
a commission authorizing any deputy commissioner of insurance fraud or any compliance
investigator who is P.O.S.T.-certified to carry and use firearms.
Proposed law eliminates the office of receivership within the Department of Insurance.
Effective August 1, 2013.
(Amends R.S. 22:3, 1921, 1922, 1926, 1927, 1928(A) (intro para), 1929(A), and R.S.
36:681(C)(1); adds R.S. 36:691.1; repeals R.S. 36:691)