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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 paragraph),2
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
authorized to have access to computer systems, information maintained for the3
use of law enforcement personnel, any information contained in the criminal4
history record and identification file of the Louisiana Bureau of Criminal5
Identification and Information, is authorized to have and direct and timely access6
to information compiled by the Federal Bureau of Investigation, as contained in the7
National Crime Identification Center for the purposes of licensure or the granting,8
denying, revocation, suspension or any other action on an application for a license9
or certificate of authority to be an insurer in the state, subject to the approval of the10
office of state police carrying out its responsibilities under this Part.11
B. The Department of Insurance, section of insurance fraud, commissioner12
of insurance is authorized to may require all applicants each applicant for a license13
or certificate of authority to submit physical evidence of the identity of the applicant.14
The commissioner of insurance is authorized to may promulgate rules and15
regulations defining the type of physical identification acceptable and the manner in16
which such evidence is to be received by the Department of Insurance.17
C. The commissioner of insurance may deny a license or certificate of18
authority when the applicant, or if the applicant is a corporation, partnership, limited19
liability company or partnership, or other legal entity, any officer, director, managing20
person, employee, or principal stockholder has been convicted of a felony.21
D. The commissioner of insurance may issue a commission authorizing22
any deputy commissioner of insurance fraud or any compliance investigator23
who is certified by the Council on Peace Officer Standards and Training24
(P.O.S.T.), or who may be qualified by the P.O.S.T. Council, to carry and use25
firearms in performance of their duties in investigating suspected crimes of26
insurance fraud. The commissioner shall also provide appropriate credentials27
and badges of authority.28
* * *29 SB NO. 180
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§1926. Duties of companies and others1
A. Any person, company, or other legal entity including but not limited to2
those engaged in the business of insurance, including producers and adjusters, which3
that suspects that a fraudulent insurance act will be, is being, or has been committed4
shall, within sixty days of the receipt of such notice, send to the section division of5
insurance fraud, on a form prescribed by the section commissioner, the information6
requested and such additional information relative to the insurance act and the parties7
claiming loss or damages because of an occurrence or accident as the section8
commissioner may require. The section division of insurance fraud shall review9
such reports and select such insurance acts as, in its judgment, may require further10
investigation. It shall then cause an independent examination of the facts surrounding11
such insurance act to be made to determine the extent, if any, to which fraud, deceit,12
or intentional misrepresentation of any kind exists in the submission of the insurance13
act.14
B. The section division of insurance fraud shall report any alleged violations15
of law which its investigations disclose to the appropriate licensing agency, the16
insurance fraud investigation unit of the office of state police, the insurance fraud17
support unit of the Department of Justice, and the prosecutive authority having18
jurisdiction with respect to any such violation. These units shall work jointly on19
criminal referrals.20
§1927. Materials and evidence21
A. If matter that the section division seeks to obtain by request is located22
outside the state, the person so requested may make it available to the section23
division or its representative to examine at the place where it is located. The section24
division may designate representatives, including officials of the state in which the25
matter is located, to inspect the matter on its behalf, and it may respond to similar26
requests from officials of other states.27
B. The section's division's papers, documents, reports, or evidence relative28
to the subject of an investigation under this Part shall not be subject to public29 SB NO. 180
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inspection for so long as the section commissioner deems reasonably necessary to1
complete the investigation, to protect the person investigated from unwarranted2
injury, or to be in the public domain. Further, such papers, documents, reports, or3
evidence relative to the subject of investigation under this Section shall not be4
subject to subpoena until opened for public inspection by the section commissioner,5
unless the section commissioner consents, or until after notice to the section6
commissioner and a hearing, a court of competent jurisdiction determines the7
section division would not be necessarily hindered by such subpoena. Section8
investigators Division personnel shall not be subject to subpoena in civil actions by9
any court of this state to testify concerning any matter of which they have knowledge10
pursuant to a pending insurance fraud investigation by the section.11
§1928. Civil immunity12
A. No insurer, employees, or agents of any insurer, or any other person acting13
without malice, fraudulent intent, or bad faith, shall be subject to civil liability for14
libel, slander, or any other relevant tort, and no civil cause of action of any nature15
shall exist against such person or entity by virtue of the filing of reports or furnishing16
other information, either orally or in writing, concerning suspected, anticipated, or17
completed fraudulent insurance acts when such reports or information are required18
by this Part or required by the section division of insurance fraud as a result of the19
authority herein granted or when such reports or information are provided to or20
received from:21
* * *22
§1929. Confidentiality of criminal background checks, civil penalties23
A. Notwithstanding any other provision of law to the contrary, criminal24
background information in the possession of the fraud section insurance fraud25
division of the Department of Insurance shall be confidential and shall not be26
disclosed to others outside of the fraud section insurance fraud division except as27
necessary for action on the application of the applicant.28
* * *29
Section 2. R.S. 36:681(C)(1) is hereby amended and reenacted and R.S. 36:691.1 is30 SB NO. 180
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hereby enacted to read as follows:1
§681. Department of Insurance; creation; domicile; purposes and functions2
* * *3
C.(1) The officers of the department shall be the commissioner of insurance,4
the chief deputy commissioner, the deputy commissioner for management and5
finance, the deputy commissioner for property and casualty, the deputy6
commissioner for receivership insurance fraud, the deputy commissioner for7
licensing and compliance, the deputy commissioner for financial solvency, the8
deputy commissioner for health insurance, the deputy commissioner for public9
affairs, the deputy commissioner for minority affairs, the deputy commissioner for10
consumer advocacy, and the executive counsel.11
* * *12
§691.1. Division of insurance fraud13
There is hereby created a division of insurance fraud in the Department14
of Insurance that shall be under the direction of the deputy commissioner for15
insurance fraud. The duties and functions of the division of insurance fraud16
and the deputy commissioner of insurance fraud shall be the investigation of17
alleged fraudulent insurance acts and other violations of the insurance laws of18
this state, executive security, and assigned by the commissioner.19
Section 3. R.S. 36:691 is hereby repealed.20
The original instrument was prepared by Cheryl Horne. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Laura Gail Sullivan.
DIGEST
Erdey (SB 180)
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 SB NO. 180
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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 authorizes the division of insurance fraud to have access to computer systems,
information maintained for the use of law enforcement personnel, any information contained
in the criminal history record and 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 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 Dept. 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)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original
bill
1. Delete the office of receivership from the composition of the Dept. of
Insurance.
2. Delete the designation of the fraud division as a law enforcement agency.
3. Delete the designation of the deputy commissioner and compliance
investigators of the fraud division as peace officers.
4. Delete the authority of the commissioner to authorize the deputy
commissioner and compliance investigators of the fraud division to arrest
persons suspected of insurance fraud.