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Regular Session, 2014
SENATE BILL NO. 620
BY SENATOR AMEDEE
MOTOR VEHICLES. Provides for settlement practices involving certain claims against
nonresident self-insurers and self-insurance plans. (8/1/14)
AN ACT1
To amend and reenact R.S. 32:880, relative to proof of financial responsibility for2
nonresident drivers involved in accidents; to provide for self-insurance or self-3
insurance plans as proof of financial security; to provide for payment of claims by4
nonresident self-insurers and self-insurance plans; to provide for processing claims5
involving certain self-insurers and self-insurance plans; to provide penalties for6
actions by nonresident self-insurers and self-insurance plans deemed arbitrary,7
capricious, and without probable cause; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 32:880 is hereby amended and reenacted to read as follows: 10
ยง880. Nonresident drivers; accidents11
A. Whenever a nonresident driver is involved in an accident in this state and12
is issued a traffic citation in connection with that accident, the nonresident driver13
shall comply with one of the following items:14
(1) Show proof of liability insurance coverage as required by law ,.15
(2) Show proof of coverage as a self-insurer or under a self-insurance16
plan from the state in which he is a resident.17 SB NO. 620
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(3) Post a bond in an amount sufficient to cover the damage caused in the1
accident, or.2
(3)(4) Deposit his driver's license with the law enforcement agency which3
that investigates the accident.4
B. As used in this Section, the phrase "nonresident driver" means a person5
who operates a motor vehicle in this state and who has a foreign driver's license, or6
a foreign registration for the motor vehicle, or both.7
C.(1) No proof of coverage as a self-insurer or under a self-insurance8
plan from the state in which the nonresident driver is a resident shall be valid9
or in compliance with the provisions of this Section unless the self-insurer or10
plan agrees to be subject to the following provisions regarding settlement of a11
claim for damages:12
(a) The self-insurer or plan shall pay the amount of any claim due a13
claimant within thirty days after receipt of satisfactory proof of loss from the14
claimant or any party in interest.15
(b) The self-insurer or plan shall pay the amount of any third-party16
property damage claim and any reasonable medical expense claim due any bona17
fide third-party claimant within thirty days after written agreement of18
settlement of the claim from the third-party claimant.19
(2) Failure to make a payment within thirty days after receipt of20
satisfactory proof of loss as provided in Subparagraph (1)(a) of this Subsection21
or within thirty days after written agreement of settlement as provided in22
Subparagraph (1)(b) of this Subsection when the failure is found to be23
arbitrary, capricious, or without probable cause, shall subject the self-insurer24
or self-insurance plan to a penalty, in addition to the amount of the loss or25
settlement agreement, of fifty percent damages on the amount due or one26
thousand dollars, whichever is greater, payable to the respective claimant or if27
a partial payment or tender has been made, fifty percent of the difference28
between the amount paid or tendered and the amount found to be due as well29 SB NO. 620
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as reasonable attorney fees and costs.1
(3)(a) The self-insurer or self-insurance plan owes a duty of good faith2
and fair dealing to the injured claimant and has an affirmative duty to adjust3
any claim fairly and promptly and to make a reasonable effort to settle any4
claim with a claimant.5
(b) Any self-insurer or self-insurance plan that breaches these duties6
shall be liable for any damages sustained as a result of the breach.7
(c) Any one of the following acts, if knowingly committed or performed8
by a self-insurer or self-insurance plan, constitutes a breach of the insurer's9
duties imposed in Subparagraph (3)(a) of this Subsection:10
(i) Misrepresenting pertinent facts or insurance policy provisions11
relating to any coverages at issue.12
(ii) Failing to pay a settlement within thirty days after an agreement is13
reduced to writing.14
(iii) Denying coverage or attempting to settle a claim on the basis of an15
application that the self-insurer or self-insurance plan knows was altered16
without notice to, or knowledge or consent of, the claimant.17
(iv) Misleading a claimant as to the applicable prescriptive period.18
(v) Failing to pay the amount of any claim due a claimant within sixty19
days after receipt of satisfactory proof of loss from the claimant when the20
failure is arbitrary, capricious, or without probable cause.21
(4) In addition to any general or special damages to which a claimant is22
entitled for breach of the imposed duty pursuant to Subparagraph (3)(a) of this23
Subsection, the claimant may be awarded penalties assessed against the self-24
insurer or self-insurance plan in an amount not to exceed two times the damages25
sustained or five thousand dollars, whichever is greater.26 SB NO. 620
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Thomas L. Tyler.
DIGEST
Amedee (SB 620)
Present law requires that if a nonresident driver is involved in an accident and is issued a
traffic citation in connection with that accident, then the nonresident driver is required to:
(1)Show proof of liability insurance coverage as required by law,
(2)Post a bond in an amount sufficient to cover the damage caused in the accident, or
(3)Deposit his driver's license with the law enforcement agency that investigates the
accident.
Proposed law retains these provisions but also allows the nonresident driver to show proof
of coverage as a self-insurer or under a self-insurance plan from the state in which he is a
resident.
Proposed law retains present definition of a "nonresident driver" as a person who operates
a motor vehicle in this state and who has a foreign driver's license, or a foreign registration
for the motor vehicle, or both.
Proposed law provides that proof of coverage as a self-insurer or under a self-insurance plan
for the nonresident driver is not valid for purposes of proposed law unless the self-insurer
or plan agrees to be subject to the following provisions regarding settlement of a claim for
damages:
(1)The self-insurer or plan shall pay the amount of any claim due a claimant within 30
days after receipt of satisfactory proof of loss from the claimant or any party in
interest.
(2)The self-insurer or plan shall pay the amount of any third-party property damage
claim and any reasonable medical expense claim due any bona fide third-party
claimant within 30 days after written agreement of settlement of the claim from the
third-party claimant.
Proposed law provides that failure to make a payment within 30 days after receipt of
satisfactory proof of loss or within 30 days after written agreement of settlement when the
failure is found to be arbitrary, capricious, or without probable cause, shall subject the self-
insurer or self-insurance plan to a penalty, in addition to the amount of the loss or settlement
agreement, of 50% damages on the amount due or $1,000, whichever is greater, payable to
the respective claimant. Provides that if a partial payment or tender has been made, a penalty
of 50% of the difference between the amount paid or tendered and the amount found to be
due as well as reasonable attorney fees and costs.
Proposed law provides that the self-insurer or self-insurance plan owes a duty of good faith
and fair dealing to the injured claimant and has an affirmative duty to adjust any claim fairly
and promptly and to make a reasonable effort to settle any claim with a claimant. Provides
that any self-insurer or self-insurance plan who breaches these duties is liable for any
damages sustained as a result of the breach.
Proposed law provides that any one of the following acts, if knowingly committed or
performed by a self-insurer or self-insurance plan, constitutes a breach of the insurer's duties
imposed under proposed law: SB NO. 620
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(1)Misrepresenting pertinent facts or insurance policy provisions relating to any
coverages at issue.
(2)Failing to pay a settlement within 30 days after an agreement is reduced to writing.
(3)Denying coverage or attempting to settle a claim on the basis of an application that
the self-insurer or self-insurance plan knows was altered without notice to, or
knowledge or consent of, the claimant.
(4)Misleading a claimant as to the applicable prescriptive period.
(5)Failing to pay the amount of any claim due a claimant within 60 days after receipt
of satisfactory proof of loss from the claimant when the failure is arbitrary,
capricious, or without probable cause.
Proposed law provides that in addition to any general or special damages to which a claimant
is entitled for breach of the imposed duty under proposed law, the claimant may be awarded
penalties assessed against self-insurer or self-insurance plan in an amount not to exceed two
times the damages sustained or $5,000, whichever is greater.
Effective August 1, 2014.
(Amends R.S. 32:880)