RÉSUMÉ DIGEST
ACT 109 (HB 288) 2019 Regular Session Hollis
New law defines "collateral", "commercially reasonable", "deductible claim", "large
deductible policy", and "other secured obligations".
New 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.
New 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.
New 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.
New law requires the receiver to use collateral, when available, to secure the insured's
obligation to fund or reimburse deductible claims, other secured obligations, or other
payment obligations. New 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.
New 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.
New 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.
New 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 January 1, 2020.
(Adds R.S. 22:2013.1)