The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Thomas L. Tyler.
DIGEST
SB Original 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 authorizes 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)One member selected by the commissioner of insurance or his designee.
(2)One member designated by the commissioner of insurance.
(3)One member who is a representative of 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 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 Personal Automobile Insurance
Procedure or the Commercial Automobile Insurance Procedure 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.
Requires that any applicant for any policy, any person insured under a policy, and any insurance
company affected may 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.
Effective August 1, 2020.
(Amend R.S. 22:1475)