Louisiana Revised Statutes 22:2297 – Powers and duties of Louisiana Citizens Property Insurance Corporation
Terms Used In Louisiana Revised Statutes 22:2297
- Assessable insurers: means insurers authorized to write one or more subject lines of business in this state. See Louisiana Revised Statutes 22:2292
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means the Louisiana Citizens Property Insurance Corporation, and includes the residual market insurance programs known as the "Coastal Plan" and the "FAIR Plan". See Louisiana Revised Statutes 22:2292
- Essential property insurance: means any of the following coverages against direct loss to property as defined by the plan of operation approved by the commissioner of insurance:
(a) Fire, with or without extended coverage and vandalism and malicious mischief. See Louisiana Revised Statutes 22:2292
- Governing board: means that board of directors which is established under Louisiana Revised Statutes 22:2292
- Insurable property: means real and tangible personal property at a fixed location in Louisiana when such property is in an insurable condition and basic property insurance is not obtainable in the voluntary market and as further defined by the governing board. See Louisiana Revised Statutes 22:2292
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Plan of operation: means the document setting the rules of operation of the corporation, as promulgated by the governing board and approved by the Louisiana Senate Committee on Insurance and the Louisiana House Committee on Insurance pursuant to the provisions of this Chapter. See Louisiana Revised Statutes 22:2292
A. The Louisiana Citizens Property Insurance Corporation shall operate insurance plans which shall function exclusively as residual market mechanisms to provide essential property insurance for residential and commercial property for applicants who are in good faith entitled, but are unable, to procure insurance through the voluntary market. The corporation shall not offer private or commercial automobile or vehicle insurance. The corporation shall operate according to a plan of operation pursuant to La. Rev. Stat. 22:2298.
B. The governing board of the corporation shall, pursuant to the provisions of this Chapter and the plan of operation and with respect to essential property insurance on insurable property, have the power:
(1) To cause to be issued policies of insurance to eligible applicants; and
(2) To employ or retain such persons as are necessary to perform the duties of the corporation.
C. The corporation may:
(1) Borrow funds necessary to effect the purposes of this Chapter. In connection therewith, the corporation may agree to such terms and conditions as it deems necessary and proper and the corporation may assign to the state or any agency or authority thereof, or to any private entity, the right to the receipt of assessments levied by the corporation on behalf of one or more of the plans, to the extent necessary to provide for the payment of bonds issued by the state or such agency or authority, or such private agency, for the purpose of providing for the repayment of such borrowings.
(2) Sue or be sued. The power to sue includes the power and right to intervene as a party before any court in this state in any matter involving the plans or the corporation’s powers and duties.
(3) Negotiate and become a party to such contracts as are necessary to carry out the purpose of this Chapter.
D. The corporation shall:
(1) Repealed by Acts 2010, No. 414, §1, eff. June 21, 2010.
(2) Retain any profits or excess reserves generated, to be used to offset deficits incurred by the plans. Such retained funds shall be invested pursuant to the limitations set forth in this Title for insurers.
(3) Develop and annually reassess a reasonable and prudent reinsurance program, for the benefit of the policyholders of the plans, to enhance the capability of the corporation to timely and efficiently handle claims from a hurricane or other natural disaster.
(4) Take all actions necessary to facilitate and maintain tax-free status for the income and operations of the corporation and the plans, and to facilitate tax-free status for bonds or other indebtedness issued by or on behalf of the corporation or the plans.
(5) Upon depopulation of the plans, such that fewer than one thousand policies are written in a plan year, and a determination by the governing board that the declaration and purpose as set forth in La. Rev. Stat. 22:2291 no longer requires operation of the plans, and with approval of the Louisiana Senate Committee on Insurance and the Louisiana House Committee on Insurance and the commissioner of insurance, effectuate a plan of dissolution of the corporation.
(6) Purchase adequate reinsurance on risks insured by the corporation and the plans, in an amount approved by the board annually, and in amounts that are actuarially justified. The board shall purchase reinsurance in an adequate amount so as to minimize the likelihood of an assessment being levied pursuant to La. Rev. Stat. 22:2307.
(7) Establish qualifications for and authorize qualified agents to have binding authority pursuant to La. Rev. Stat. 22:2313.
(8) Perform such other acts as are necessary or proper to effectuate the purpose of this Chapter.
E. The governing board of the corporation shall be prohibited from authorizing any rehabilitation, liquidation, or dissolution of the corporation, and no such rehabilitation, liquidation, or dissolution of the corporation shall take effect as long as the corporation has bonds or other financial obligations outstanding unless adequate protection and provision has been made for the payment of the bonds or other financial obligations pursuant to the documents authorizing the issuance of the bonds or other financial obligations. In the event of any rehabilitation, liquidation, or dissolution, the assets of the corporation shall be applied first to pay all debts, liabilities, and obligations of the corporation, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the corporation shall become property of the state and be deposited in the general fund.
F.(1) The governing board of the corporation may seek and accept federal funds from the United States Department of Housing and Urban Development under the Community Development Block Grant Program. Any such funds shall be used by the corporation only to pay any current or other obligations on bonds or other indebtedness issued by the corporation for the purpose of paying any cost and claims that arose due to losses caused by hurricanes in the year 2005. In the event the governing board of the corporation receives federal funds from the United States Department of Housing and Urban Development under the Community Development Block Grant Program, for those funds remaining after the bonds are paid off, satisfied, or defeased, the corporation shall credit such amounts on a pro rata basis to assessable insurers who were subject to an assessment as provided for pursuant to La. Rev. Stat. 22:2291 et seq., and who will thereafter return such amount to the insured.
(2) The governing board of the corporation shall report annually to the House Committee on Insurance and the Senate Committee on Insurance on its usage of any funds received pursuant to Paragraph (1) of this Subsection.
Acts 2003, No. 1133, §1; Acts 2006, 1st Ex. Sess., No. 13, §1, eff. Feb. 23, 2006; Acts 2006, 1st Ex. Sess., No. 19, §1; Acts 2006, No. 787, §1; Redesignated from La. Rev. Stat. 22:1430.6 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 414, §1, eff. June 21, 2010; Acts 2012, No. 271, §1.