Amedee (SB 620) Act No. 500
Prior law required 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.
New 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.
New 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.
New 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 new 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.
New 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.
New 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.
New 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 new law:
(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.
New law provides that in addition to any general or special damages to which a claimant is
entitled for breach of the imposed duty under new 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)