RÉSUMÉ DIGEST
HB 609 2018 Regular Session Seabaugh
Proposed law would have defined "collateral", "commercially reasonable", "deductible
claim", "large deductible policy", and "other secured obligations".
Proposed law would have required, 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 were funded by an insured before
liquidation, to be turned over to the guaranty association for handling.
Proposed law would have provided that, to the extent a guaranty association pays any
deductible claim for which the insurer was entitled to reimbursement from the insured, a
guaranty association shall be entitled to the full amount of the reimbursement and available
collateral.
Proposed law would have required 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 would have required 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 would have provided 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 would have required claims that are validly asserted against the collateral to
be satisfied in the order in which the claims are received by the receiver and would have
provided 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 would have authorized 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 would not have limited or adversely affected 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.
(Proposed to add R.S. 22:2013.1)
VETO MESSAGE:
"Please be advised that I have vetoed House Bills 607 and 609 by Representative Alan
Seabaugh. These two bills provide for unnecessary additional regulations on the insurance
industry that may result in additional costs being passed along to policy holders."