RÉSUMÉ DIGEST
ACT 53 (SB 71) 2020 Regular Session Smith
Prior law, relative to rate making procedures and organizations, assigned 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.
Provided that no domestic insurance company shall be denied servicing carrier status.
New 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.
Prior law provided 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.
New law retains these provisions in prior law.
New 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.
New 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.
New 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. New 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.
Prior law, the Motor Vehicle Safety and Responsibility Law, did 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 prior 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.
New law makes prior law exceptions applicable to new law.
Effective January 1, 2021.
(Amends R.S. 22:1475; repeals R.S. 32:1043)