SLS 20RS-211 REENGROSSED
2020 Regular Session
SENATE BILL NO. 71
BY SENATOR SMITH
AUTOMOBILE INSURANCE. Provides for the Louisiana Automotive Insurance Plan.
(1/1/21)
1 AN ACT
2 To amend and reenact R.S. 22:1475 and to repeal R.S. 32:1043, relative to the Louisiana
3 Automobile Insurance Plan; to provide for motor vehicle policies issued in
4 compliance with the plan; to repeal certain duplicative provisions regarding residual
5 market plans in the Motor Vehicle Safety Responsibility Law; and to provide for
6 related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 22:1475 is hereby amended and reenacted to read as follows:
9 ยง1475. Assigned risks; governing committee of the Louisiana Automobile Insurance
10 Plan
11 A. With respect to casualty insurance to which this Subpart applies,
12 agreement may be made among insurers with respect to the equitable apportionment
13 among them of insurance which may be afforded applicants who are in good faith
14 entitled to, but who are unable to procure such insurance through ordinary methods,
15 and such insurers may agree among themselves on the use of reasonable rate
16 modifications for such insurance, such agreements and rate modifications to be
17 subject to the approval of the commissioner of insurance. No domestic insurance
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Coding: Words which are struck through are deletions from existing law;
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SLS 20RS-211 REENGROSSED
1 company shall be denied servicing carrier status. After consultation with insurance
2 companies authorized to issue motor vehicle insurance in this state, the
3 commissioner of insurance shall approve a reasonable plan, the Louisiana
4 Automobile Insurance Plan, which shall function exclusively as a residual
5 market mechanism, to applicants who are in good faith entitled to, but are
6 unable to, procure such insurance through ordinary means, for the purpose of
7 insuring private passenger motor vehicles, commercial motor vehicles including
8 garage liability insurance, and other motor vehicles.
9 B. The governing committee of the assigned risks, or "Louisiana Automobile
10 Insurance Plan", referred to in this Section as the "plan", shall consist of the
11 following nine members:
12 (1) One member shall be the The commissioner of insurance or his designee.
13 (2) One member designated by the commissioner of insurance.
14 (3) One member shall be a representative designated by the Louisiana
15 Association of Fire and Casualty Insurance Companies.
16 (4) One member shall be appointed designated by the president of the
17 Senate.
18 (5) One member shall be appointed designated by the speaker of the House
19 of Representatives.
20 (6) The remaining four Four members shall consist of representatives
21 selected from and by the membership subject to final approval by the commissioner
22 of insurance.
23 C. The plan may establish a Personal Automobile Insurance Procedure,
24 referred to in this Section as "PAIP", to do the following:
25 (1) Cause to be issued policies of private passenger automobile insurance
26 in the plan's name to eligible applicants, as described in Subsection A of this
27 Section, and to provide policyholder and claim handling services.
28 (2) Allocate the operating results of the PAIP, profit or loss, to those
29 subscribers that write private passenger motor vehicle insurance.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 71
SLS 20RS-211 REENGROSSED
1 D. The plan may establish a Commercial Automobile Insurance
2 Procedure, referred to in this Section as "CAIP", to do the following:
3 (1) Appoint an insurance company or companies to act as a servicing
4 carrier to issue commercial automobile insurance policies to eligible applicants,
5 as described in Subsection A of this Section, and to provide policyholder and
6 claim handling services.
7 (2) Cause to be issued policies of commercial automobile insurance in the
8 plan's name to eligible applicants, as described in Subsection A of this Section,
9 and to provide policyholder and claim handling services.
10 (3) Allocate the operating results of the CAIP, profit or loss, to those
11 subscribers that write commercial motor vehicle insurance.
12 E. Any policy of insurance issued by the plan pursuant to the Personal
13 Automobile Insurance Procedure or the Commercial Automobile Insurance
14 Procedure shall be recognized as if issued by an insurance company authorized
15 to issue insurance in this state.
16 F. Every form of a policy, endorsement, rider, manual of classification,
17 rules, and rates, every rating plan, and every modification of any of them
18 proposed to be used by the plan shall be filed and approved by the
19 commissioner of insurance.
20 G. All insurance companies writing insurance for private passenger
21 motor vehicles, commercial motor vehicles, and other motor vehicles in this
22 state shall be subscribers to the plan and share in the administrative expenses
23 for the operation of the plan based on a subscriber fee and an assessment based
24 on the market share of premiums.
25 H. Any applicant for any policy, any person insured under any such
26 policy, and any insurance company affected may appeal to the commissioner of
27 insurance from any ruling or decision of the manager or the governing
28 committee of the plan to operate the plan. Any person aggrieved by an order or
29 act of the commissioner of insurance may, within ten days after receipt of
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Coding: Words which are struck through are deletions from existing law;
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1 written notice of the order or act, file a petition in the Nineteenth Judicial
2 District Court or in the district court of the domicile of the aggrieved person,
3 for a review of the order or action. The court shall summarily hear the petition
4 and make the appropriate order or decree.
5 I. The exceptions contained under the provisions of R.S. 32:1041(A) shall
6 apply to the plan functioning as a residual market mechanism.
7 Section 2. R.S. 32:1043 is hereby repealed.
8 Section 3.This Act shall become effective on January 1, 2021.
The original instrument was prepared by Thomas L. Tyler. The following
digest, which constitutes no part of the legislative instrument, was prepared
by LG Sullivan.
DIGEST
SB Reengrossed 2020 Regular Session Smith
Present law, relative to rate making procedures and organizations, assigns risks under the La.
Automobile Insurance Plan, and in an effort to provide applicants for casualty insurance
coverage who are in good faith but unable to procure coverage through ordinary methods,
authorizes casualty insurers to agree among themselves on the use of reasonable rate
modifications for coverage but subject to approval of the commissioner of insurance.
Provides that no domestic insurance company shall be denied servicing carrier status.
Proposed law requires the commissioner of insurance, after consulting with insurers
authorized to issue motor vehicle insurance, to approve a reasonable plan, known as the
Louisiana Automobile Insurance Plan (Plan), which is to function exclusively as a residual
market mechanism, for those good-faith applicants unable to procure coverage through
ordinary means in order to insure private passenger motor vehicles, commercial motor
vehicles including garage liability insurance, and other motor vehicles.
Present law provides that the governing committee of the assigned risks or the La.
Automobile Insurance Plan consists of the following nine members:
(1)The commissioner of insurance, or his designee.
(2)One member designated by the commissioner of insurance.
(3)One member representing the La. Association of Fire & Casualty Insurance
Companies.
(4)One member appointed by the president of the Senate.
(5)One member appointed by the speaker of the House.
(6)Four members selected from and by the membership subject to approval by the
commissioner of insurance.
Proposed law retains these provisions in present law.
Proposed law creates a Personal Automobile Insurance Procedure (PAIP) to do the
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words in boldface type and underscored are additions. SB NO. 71
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following:
(1)Cause to be issued policies of private passenger automobile insurance in the Plan's
name to eligible applicants, and to provide policyholder and claim handling services.
(2)Allocate the operating results of the PAIP, profit or loss, to those subscribers that
write private passenger motor vehicle insurance.
Proposed law also creates a Commercial Automobile Insurance Procedure (CAIP) to do the
following:
(1)Appoint a company or companies to act as a servicing carrier to issue commercial
automobile insurance policies to eligible applicants and to provide policyholder and
claim handling services.
(2)Cause to be issued policies of commercial automobile insurance in the Plan's name
to eligible applicants and to provide policyholder and claim handling services.
(3)Allocate the operating results of the CAIP, profit or loss, to those subscribers that
write commercial motor vehicle insurance.
Proposed law requires that any policy issued pursuant to the PAIP or the CAIP be recognized
as if issued by an insurance company authorized to issue policies in this state. Requires that
every form of a policy, endorsement, rider, manual of classification, rules, and rates, every
rating plan and every modification of any of them proposed to be used by the Plan be filed
and approved by the commissioner of insurance.
Proposed law requires that all companies writing insurance for private passenger motor
vehicles, commercial motor vehicles, and other motor vehicles in this state be subscribers
to the Plan and share in the administrative expenses for the operation of the Plan based on
a subscriber fee and an assessment based on the market share of premiums.
Allows any applicant for any policy, any person insured under a policy, and any insurance
company affected to appeal to the commissioner from any ruling or decision of the manager
or the governing committee of the Plan to operate the Plan. Authorizes any person aggrieved
by an order or act of the commissioner to file a petition, within ten days after receipt of
written notice of the order or act, in the 19th JDC or in the district court of the domicile of
the aggrieved person, for a review of the order or action. Requires the court to summarily
hear the petition and make the appropriate order or decree.
Present law, the Motor Vehicle Safety and Responsibility Law, does not apply to any motor
vehicle owned by the United States, this state or any political subdivision or municipality
in this state, a bona fide organized public volunteer fire department which owns and operates
those specially equipped motor vehicles for firefighting purposes, nor, except for other
specific present law, with respect to any motor vehicle which is subject to the jurisdiction
of the Louisiana Public Service Commission, or to any motor vehicle subject to registration
under the single state registration for motor carriers authorized by present federal law, or as
otherwise permitted by present federal law, or to carriers of persons operating over specified
routes with fixed termini and predominantly under franchises or indeterminate permits
granted by an incorporated municipality and who are subject to the regulatory jurisdiction
of such municipality.
Proposed law makes present law exceptions applicable to proposed law.
Effective January 1, 2021.
(Amends R.S. 22:1475; repeals R.S. 32:1043)
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Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original
bill
1. Repeals provisions in present law to provide consistency.
2. Changes effective date.
3. Provides exceptions.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.