DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 609 Reengrossed 2018 Regular Session Seabaugh
Abstract: Provides for the right of the receiver or a guaranty association to pursue collateral.
Proposed law defines "collateral", "commercially reasonable", "deductible claim", "large deductible
policy", and "other secured obligations".
Proposed law requires, unless otherwise agreed by the responsible guaranty association, all large
deductible claims, which are also covered claims as defined by the applicable guaranty association
law, including those that may have been funded by an insured before liquidation, to be turned over
to the guaranty association for handling.
Proposed law provides that, to the extent a guaranty association pays any deductible claim for which
the insurer would have been entitled to reimbursement from the insured, a guaranty association shall
be entitled to the full amount of the reimbursement and available collateral.
Proposed law requires the receiver to collect reimbursements owed for deductible claims, take all
commercially reasonable actions to collect the reimbursements, and promptly bill insureds for
reimbursement of deductible claims.
Proposed law requires the receiver to use collateral, when available, to secure the insured's obligation
to fund or reimburse deductible claims or other secured obligations or other payment obligations.
Proposed law further provides that a guaranty association is entitled to collateral to the extent needed
to reimburse a guaranty association for the payment of a deductible claim.
Proposed law requires claims that are validly asserted against the collateral to be satisfied in the
order in which the claims are received by the receiver and provides that excess collateral may be
returned to the insured as determined by the receiver after a periodic review of claims paid,
outstanding case reserves, and a factor for incurred but not reported claims.
Proposed law authorizes the receiver to deduct from the collateral or from the deductible
reimbursements reasonable and actual expenses incurred in connection with the collection of the
collateral and deductible reimbursements.
Proposed law shall not limit or adversely affect any rights or powers a guaranty association may have
under applicable state law to obtain reimbursement from certain classes of policyholders for claims
payments made by the guaranty association under policies of the insolvent insurer, or for related
expenses the guaranty association incurs. Effective Jan. 1, 2019.
(Adds R.S. 22:2013.1)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Insurance to the original bill:
1. Delete proposed law requiring the prorating of payments for claims against the collateral.
2. Make technical changes.