Louisiana Revised Statutes 3:4351.9 – A. In the event the fund is insolvent, then in addition to any other provision of law or rule, the department shall require that the fund files a plan in writing within sixty days fr
Terms Used In Louisiana Revised Statutes 3:4351.9
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Department: means the Department of Insurance. See Louisiana Revised Statutes 3:4351.1
- Fund: means the self-insurance fund established pursuant to this Part to provide automobile coverage for timber transportation vehicles, agriculture transportation vehicles, or a combination of both types of vehicles and shall be known as the Louisiana Agriculture Transportation Group Self-Insured Fund. See Louisiana Revised Statutes 3:4351.1
- Hazardous financial condition: means a condition in which, based upon its present or reasonably anticipated financial condition, the fund, although not yet financially impaired or insolvent, is unlikely to be able to:
(a) Meet obligations with respect to known claims and reasonably anticipated claims. See Louisiana Revised Statutes 3:4351.1
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Insolvency: means the condition existing when the fund's liabilities are greater than the fund's assets as determined in accordance with generally accepted accounting principles as delineated in the fund's financial statement audited by an independent certified public accountant and calculated before a member distribution is payable or before a dividend is declared. See Louisiana Revised Statutes 3:4351.1
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
A. In the event the fund is insolvent, then in addition to any other provision of law or rule, the department shall require that the fund files a plan in writing within sixty days from the date that the fund becomes aware of the insolvency, and the plan shall be signed by the board of trustees. For the purpose of determining insolvency, assets will not include intangible property, such as patents, trade names, or goodwill. The plan submitted by the fund to eliminate the insolvency shall set forth in detail the means by which the fund intends to eliminate the insolvency and may include an assessment of the members of the fund. The fund shall also include the timetable for the implementation of the plan and requirements for reporting to the department. The department shall review the plan submitted by the fund and notify the fund of the plan’s approval or disapproval within thirty days of the department’s receipt of the plan.
B. Upon determination by the department that a plan submitted by the fund is disapproved or that the fund is not implementing a plan in accordance with the terms of the plan, it shall notify the fund in writing of the determination.
C. If the fund fails to file a plan to eliminate an insolvency as called for pursuant to this Section, or if the department notifies the fund that the plan has been disapproved or that the fund is not implementing the plan according to the plan, the department shall have the following powers and authority in addition to any other powers and authority granted under law:
(1) To order the fund to immediately levy an assessment upon its members in an amount sufficient to eliminate the insolvency.
(2) To levy an assessment, in the name of the fund, upon the members of the fund sufficient to eliminate the insolvency if the fund fails or refuses to levy the assessment.
D.(1) In addition to any other powers of the department, in the event that the group self-insurance fund is insolvent, operating in a hazardous financial condition, or operating in violation of the requirements of this Part, the department is hereby expressly authorized to institute delinquency proceedings against the fund, including entering an order for injunctive relief or placing the fund into administrative supervision pursuant to La. Rev. Stat. 22:731 et seq. or into receivership pursuant to La. Rev. Stat. 22:2001 et seq.
(2)(a) The Nineteenth Judicial District Court shall have exclusive jurisdiction to hear any delinquency proceeding instituted by the department for the failure of the fund to comply with the approved corrective action plan.
(b) The court may issue an injunction to restrain the fund and its officers, agents, directors, or employees from transacting any insurance business or disposing of property until further action by the court. The court may issue any other injunction as it deems necessary to prevent interference with the proceedings or with the ability of the department to conduct business, as well as any injunction sought to protect any assets that are in the control of the department.
(3) The department shall promulgate rules and regulations in accordance with the Administrative Procedure Act providing for the grounds, conduct, and procedures applicable to the delinquency proceedings.
E. The distribution of general assets from the estate of the fund shall be prioritized as follows:
(1) The department’s costs and expenses of administration.
(2) Payment of claims to third parties and insureds arising out of and within the coverage of agreements or evidences of coverage issued by the fund, up to the policy limits.
(3) Payment of claims by the federal government other than those claims otherwise prioritized within this Subsection.
(4) Payment of compensation owed to employees of the fund shall be paid in accordance with the applicable provisions of administrative supervision pursuant to La. Rev. Stat. 22:731 et seq. or receivership pursuant to La. Rev. Stat. 22:2001 et seq.
(5) Payment of claims for unearned premiums or other premium refunds and claims of general creditors, including claims of any ceding and assuming company in their capacity as such.
(6) Payment of all other claims.
Acts 2022, No. 586, §1, eff. June 17, 2022; Acts 2022, No. 598, §1, eff. June 18, 2022.