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Regular Session, 2014 ENROLLED
SENATE BILL NO. 198
BY SENATOR RISER
AN ACT1
To amend and reenact R.S. 23:1168(A)(1) and (4) and (B), 1170(A) and (B), 1171, 1171.1,2
and 1291(C)(5) and to enact R.S. 23:1170(C), and to repeal R.S. 23:1168(A)(5),3
relative to workers' compensation; to require for compliance; to provide for reporting4
of compliant coverage; to provide for penalties; to provide for matters to be5
determined by workers' compensation judges; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 23:1168(A)(1) and (4) and (B), 1170(A) and (B), 1171, 1171.1, and8
1291(C)(5) are hereby amended and reenacted and R.S. 23:1170(C) is hereby enacted to read9
as follows:10
§1168. Ways of securing compensation to employees11
A. An employer shall secure compensation to his employees in one of the12
following ways:13
(1) By insuring and keeping insured the payment of such compensation with14
any stock corporation, mutual association, or other concern authorized to transact the15
business of workers' compensation insurance in this state. When an insurer issues a16
policy to provide workers' compensation benefits pursuant to the provisions of the17
Workers' Compensation Act, the insurer shall file, or cause to be filed, with the18
director a notice in such form and detail as the director may prescribe by rule and19
regulation. The notice shall contain the name, address, and principal occupation of20
the employer, the number, effective date, and expiration date of the policy, and such21
other information as may be required by the director. The notice shall be filed by the22
insurer within thirty days after the effective date of the policy report to the National23
Council on Compensation Insurance all policy information in accordance with24 SB NO. 198 ENROLLED
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the reporting guidelines established by the National Council on Compensation1
Insurance. Proof of coverage must be filed no later than thirty days after the2
effective date of coverage and include the name of each business entity3
operating in the state of Louisiana for which coverage is provided.4
* * *5
(4) By using any combination of life, accident, health, property, casualty or6
other insurance policies offered:7
(a) By any stock corporation, mutual association or other concern authorized8
to transact the business of insurance in this state;9
(b) By any group of individual, unincorporated alien insurers with assets held10
in trust for the benefit of its United States policyholders in a sum not less than one11
hundred million dollars and which is authorized to transact insurance in at least one12
state; or13
(c) By any other insurer which has been approved by the commissioner of14
insurance, and has capital and surplus, or the equivalent thereof, of at least ten15
million dollars and its financial condition, as evidenced by its most recent annual16
statement, conforms substantially to the same standards of solvency which would be17
required if such insurer were licensed in this state.18
(5)(4) By furnishing satisfactory proof to the director of the employer's19
financial ability to pay such compensation. The director, pursuant to rules adopted20
by the office for an individual self-insured or own risk carrier, including but not21
limited to rules relative to security and excess coverage, shall require that an22
employer:23
(a) Deposit with the director securities or a surety bond in an amount24
determined by the director which would be at least an average of the yearly claims25
for the last three years.26
(b) Provide proof of excess coverage with such terms and conditions as is27
commensurate with their ability to pay the benefits required by the provisions of the28
Workers' Compensation Act.29
B.(1) The director may waive the requirements of Paragraph A(5)(4) of this30 SB NO. 198 ENROLLED
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Section if he finds any company able to pay benefits, and that the requirements of1
these provisions are unnecessary. He shall establish rules which set standards for2
such waiver.3
(2) The director shall waive the requirements of Paragraph A(5)(4) of this4
Section if any employer that is a municipality or other political subdivision of the5
state is able to demonstrate financial responsibility and ability to pay benefits by the6
filing of annual reports including statements of financial condition and summary loss7
data detailing past claims experience.8
* * *9
§1170. Penalty for failure to secure workers' compensation insurance; assessment10
and collection11
A. In addition to any other penalty prescribed by law, any employer who fails12
to secure compensation required by R.S. 23:1168 shall be liable for a civil penalty,13
to be assessed by the executive director or his designee workers' compensation14
judge, of not more than two hundred fifty dollars per employee for a first offense,15
and liable for a civil penalty of not more than five hundred dollars per employee for16
a second or subsequent offense; however, the maximum civil penalty for a first17
offense shall not exceed ten thousand dollars for all related series of violations. All18
civil penalties collected shall be deposited in the Office of Workers' Compensation19
Administrative Fund established in R.S. 23:1291.1(E).20
B. The financial and compliance officer of the office of worker's21
compensation workers' compensation judge shall assess and collect any civil22
penalty incurred under R.S. 23:1170(A) Subsection A of this Section against any23
employer who fails to provide proof of compliance within fifteen days of any notice.24
Any penalty assessed and collected pursuant to this Section shall be forwarded25
to the fraud administrator for collection. In his discretion, the financial and26
compliance officer fraud administrator may remit, mitigate, or negotiate said the27
penalty if proof of the mitigating circumstances is provided within fifteen days of28
notice of the assessment. In determining the amount of the penalty to be assessed,29
or the amount agreed upon in any negotiation, consideration shall be given to the30 SB NO. 198 ENROLLED
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appropriateness of such penalty in light of the life of the business of the employer1
charged, the gravity of the violation, and the extent to which the employer charged2
has complied with the provisions of R.S. 23:1168, or has otherwise attempted to3
remedy the consequences of the said violation. Individual proceedings shall be4
conducted pursuant to the provisions of R.S. 23:1171.5
C. In addition to any penalties assessed in accordance with the provisions6
of this Chapter, the workers' compensation judge shall order the employer to7
provide proof of compliance with R.S. 23:1168 within forty-five days of the8
order.9
§1171. Civil fine; hearing; appeal10
A. The financial and compliance officer shall determine from all of the11
evidence submitted by the employer a fair and equitable resolution of the violation,12
taking into consideration any mitigating circumstances timely submitted as required13
by R.S. 23:1170. The financial and compliance officer shall assess, upon14
examination of the information submitted, a penalty commensurate with the violation15
so adjudged. However, the employer may provide additional mitigating16
circumstances or evidence to the financial and compliance officer within ten days of17
the assessment, and a reevaluation of the penalty shall be conducted. Unless a formal18
hearing is requested pursuant to the provisions of R.S. 23:1171(B), the penalty shall19
become final within thirty days of assessment. Upon becoming final, the penalty20
shall be regarded as any other money judgment and may be pursued for collection21
as prescribed by law for any other such remedy.22
B. An employer may appeal the decision of the financial and compliance23
officer to the workers' compensation judge in the district in which the business of the24
employer is located or East Baton Rouge Parish by filing, within thirty days of the25
date of assessment, a written request for a formal hearing, which request should be26
filed on a disputed claim form. All appeals to the workers' compensation judge shall27
be de novo. A final order from a hearing may be appealed to the appropriate court28
of appeal in the manner provided in R.S. 23:1310.5(B) for appealing decisions29
regarding disputed claims.30 SB NO. 198 ENROLLED
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§1171.1. Discontinuance of business; injunction; procedure1
A. The director, or his designee, shall investigate an employer if he receives2
information from any person or entity that such employer has failed to provide3
security for compensation as required by R.S. 23:1168. If such allegations can be4
reasonably substantiated, and the employer has previously been subject to a civil5
penalty pursuant to R.S. 23:1170 or criminal penalties pursuant to R.S. 23:1172,6
the director, or his designee, and the employer has previously been fined under7
R.S. 23:1170 or been penalized under R.S. 23:1172, the director shall notify the8
employer that, unless he can show proof of compliance with R.S. 23:1168 within9
fifteen days, he may shall be subject to further fines and penalties including but not10
limited to an injunction against further business operations a civil penalty pursuant11
to the provisions of R.S. 23:1170.12
B. If within fifteen days of the employer's receipt of such notice, he has not13
submitted to the director satisfactory proof of such compliance, the director shall set14
the matter for hearing in accordance with the procedures set forth by law for claims15
for workers' compensation benefits If such allegations can be reasonably16
substantiated and the employer has been fined under R.S. 23:1170 or penalized17
under R.S. 23:1172, the director shall notify the employer that unless he can18
show proof of compliance with R.S. 23:1168 within fifteen days, he shall be19
subject to further fines and penalties, including but not limited to an injunction20
against further business operations.21
C. If within fifteen days of the employer's receipt of such notice he has22
not submitted to the director satisfactory proof of such compliance, the director23
or his designee shall request the workers' compensation judge of any district24
where the employer does business to set the matter for hearing in accordance25
with the procedures set forth by law for claims for workers' compensation26
benefits. Upon the request of the director or his designee, the workers'27
compensation judge shall issue a rule to show cause to the employer why he28
should not be fined or penalized for failure to show proof of compliance with29
R.S. 23:1168 when requested.30 SB NO. 198 ENROLLED
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D.(1) If at such hearing, it is determined that the employer is in violation of1
his obligation under R.S. 23:1168, the workers' compensation judge may shall fine2
the employer in the manner provided pursuant to R.S. 23:1170(A) and shall order the3
employer to secure workers' compensation insurance and file evidence of coverage4
within ninety days of the order provide proof of compliance with R.S. 23:11685
within forty-five days of the order by securing the appropriate coverage. Should6
the employer fail to file such evidence, the workers' compensation judge shall assess7
a fine for a second offense and issue a cease and desist order prohibiting the8
employer from continuing its business operations until such time as the employer9
complies with R.S. 23:1168, and all fines issued are paid in full.10
(2) Any cease and desist order issued by the workers' compensation judge11
under Paragraph (C)(1) of this Subsection shall include specific findings of fact12
based upon evidence of all of the following:13
(a) The employer received notice of the hearing.14
(b) The employer employs employees for whom it must secure workers'15
compensation insurance or be authorized to self-insure under the provisions of this16
Chapter.17
(c) The employer has willfully failed to provide security for compensation18
as required by R.S. 23:1168 and there has been a final determination in a matter in19
which the employer has been fined under R.S. 23:1170 or penalized under R.S.20
23:1172.21
(d) The employer continues to operate its business in the absence of such22
security for compensation.23
(3) There shall be a presumption that an employer who has previously been24
civilly fined for a second offense, or has previously been criminally penalized, has25
willfully failed to secure his obligation under R.S. 23:1168.26
(4) A cease and desist order shall not issue prior to a hearing and there shall27
be no interruption of an employer's business operation if he submits satisfactory28
proof to the workers' compensation judge of his compliance with R.S. 23:1168,29
regardless of whether he may have been in violation thereof previously.30 SB NO. 198 ENROLLED
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D.E. (1) After the issuance of a cease and desist order and upon the request1
of the director or the director's designee, the attorney general shall immediately2
institute proceedings for injunctive relief against the employer in the district court3
of any judicial district in this state where the employer does business. In such district4
court proceedings, a certified copy of any cease and desist order entered by the5
workers' compensation judge in accordance with this Section based upon evidence6
in the record shall be prima facie evidence of the facts found in such record.7
(2) Such injunctive relief may include the issuance of a temporary restraining8
order under Louisiana Code of Civil Procedure Article 3601 et seq., which order9
shall enjoin the employer from continuing its business operations until it has10
procured the required insurance or authorization to self-insure or has posted adequate11
security with the court pending the procurement of such insurance or authorization.12
The court, in its discretion, shall determine the amount that shall constitute adequate13
security.14
E.F. The issuance of an order to cease and desist or the issuance of a15
temporary restraining order or an injunction against an employer for failure to insure16
or keep insurance in force as required by R.S. 23:1168 shall be in addition to any17
civil or criminal penalties imposed by any other provision of law or Paragraph18
C(D)(1) of this Section.19
PART IV. ADMINISTRATION OF CLAIMS20
SUBPART A. OFFICE OF WORKERS' COMPENSATI ON ADMINISTRATION21
§1291. Creation, powers, and duties of the office of workers' compensation22
administration23
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C. There shall be established within the office the following sections:25
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(5) A workers' compensation fraud section, which shall administer the27
provisions of R.S. 23:1170, 1171, 1171.1, 1172, 1172.1, 1172.2, 1208, and 1295 by28
investigating allegations of workers' compensation fraud and noncompliance by29
employers.30 SB NO. 198 ENROLLED
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Section 2. R.S. 23:1168(A)(5) is hereby repealed.2
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: