Louisiana Revised Statutes 23:1395 – Exemptions; rate regulation; surplus; reserves; guaranty funds
Terms Used In Louisiana Revised Statutes 23:1395
- Board: means the board of directors of the corporation. See Louisiana Revised Statutes 23:1392
- 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 Workers' Compensation Corporation. See Louisiana Revised Statutes 23:1392
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Good faith: means honesty in fact in any conduct of a transaction. See Louisiana Revised Statutes 23:1392
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Office: means the office of workers' compensation administration established pursuant to Louisiana Revised Statutes 23:1021
A. The corporation shall be exempt from rate regulation by the commissioner of insurance.
B. Except as provided in La. Rev. Stat. 23:1404, the corporation shall not be required to comply with any surplus requirements for a domestic mutual insurer. However, upon extinguishment of the full faith and credit guarantee of the state, as provided in the constitution, and notwithstanding La. Rev. Stat. 23:1404, the corporation shall comply with surplus requirements for a domestic mutual insurer.
C. Except as provided in La. Rev. Stat. 23:1404, the corporation shall not be required to comply with any reserve requirements for a domestic mutual insurer. However, upon extinguishment of the full faith and credit guarantee of the state, as provided in the constitution, and notwithstanding La. Rev. Stat. 23:1404, the corporation shall comply with reserve requirements for a domestic mutual insurer.
D.(1) Notwithstanding any other law to the contrary, the corporation and its policyholders shall be exempt from participation and shall not join or contribute financially to, nor be entitled to the protection of, any plan, pool, association, or guaranty or insolvency fund authorized or required by the Louisiana Insurance Code; however, the corporation shall pay premium taxes.
(2) However, upon the extinguishment of the full faith and credit guarantee of the state, which occurs when the United States Department of Labor approves the corporation to provide United States Longshore and Harbor Worker’s Compensation Act coverage without the state guarantee, the corporation shall participate in, contribute to, and receive protection under the insurance guaranty association fund created and operating under La. Rev. Stat. 22:2051 et seq., of the Insurance Code. The corporation’s participation in, contribution to, and protection under the insurance guaranty association fund shall be on a prospective basis only. This prospective participation, contribution, and protection shall apply to claims arising from injuries occurring after the extinguishment of the full faith and credit guarantee.
(3) Upon the extinguishment of the full faith and credit guarantee as provided in La. Rev. Stat. 23:1404(B) and in addition to the deposit required by La. Rev. Stat. 22:808, the corporation shall provide one of the following as security to hold the state harmless from all claims arising from any legal obligation of the corporation to which the full faith and credit guarantee of the state is pledged:
(a) Deposit with the commissioner of insurance:
(i) Safekeeping or trust receipts from banks doing business within this state or from savings and loan associations chartered to do business in this state indicating that the corporation has deposited an amount equal to twelve percent of its outstanding liabilities not covered by the Louisiana Insurance Guaranty Association, calculated using the most recent quarterly financial statements as filed with the Department of Insurance, or
(ii) A bond of the United States, this state, or any political subdivision thereof, of the par value of not less than an amount equal to twelve percent of its outstanding liabilities not covered by the Louisiana Insurance Guaranty Association, calculated using the most recent quarterly financial statements as filed with the Department of Insurance.
(iii) All securities deposited pursuant to this Subparagraph shall be held in trust to hold the state harmless from all claims arising from any legal obligation of the corporation to which the full faith and credit guarantee of the state is pledged.
(b) Deliver to the commissioner of insurance a bond in the amount equal to twelve percent of its outstanding liabilities not covered by the Louisiana Insurance Guaranty Association, calculated using the most recent quarterly financial statements as filed with the Department of Insurance. The bond shall issue from an authorized surety company doing business in this state which has a minimum surplus of five hundred million dollars and is subject to approval of the commissioner of insurance. The bond shall be conditioned on the same terms as stated in Subparagraph (a) and must be renewed annually. No such bond shall be cancelled unless a new bond or deposit has been substituted or satisfactory evidence has been submitted to the commissioner of insurance that no further liability exists for all claims arising from any legal obligation of the corporation to which the full faith and credit guarantee of the state is pledged. The term of these bonds shall be for one year, but the last bond shall always remain in effect until a new bond is filed or either a deposit is made pursuant to Subparagraph (a) or a reinsurance agreement entered into pursuant to Subparagraph (c) as a substitution therefor.
(c) A reinsurance agreement with an insurer authorized to make such reinsurance and authorized to do business in this state against any loss in connection with all claims of any legal obligation of the corporation to which the full faith and credit guarantee of the state is pledged. Pursuant to such agreement, the commissioner shall be authorized to examine the books and records of the reinsurer. During the term of such reinsurance, the reinsurer shall file annually with the commissioner of insurance a true copy of its annual statement with the insurance department of its state of domicile and a copy of its most recent audited financial statement.
(4) Upon request by the corporation and compliance with the pertinent provisions above, the commissioner may permit the corporation to substitute one form of security for another, all as described in Paragraph (3).
(5) Upon proper presentation of claims information, the commissioner of insurance shall release a portion of the initial amount of the deposit or authorize a reduction in the bond or the amount of the reinsurance agreement, as appropriate. When evidence is presented to the commissioner of insurance that no further liability exists from any claim arising from any legal obligation of the corporation to which the full faith and credit guarantee of the state is pledged, the commissioner shall consent to terminate the deposit, bond, or reinsurance agreement.
E. The corporation shall be liable for payment of assessments imposed by the Louisiana Office of Workers’ Compensation Administration, the Louisiana Workers’ Compensation Second Injury Fund, and the United States Department of Labor pursuant to Section 44 of the United States Longshore and Harbor Worker’s Compensation Act.
F. There shall be no liability on the part of and no cause of action shall arise against the corporation, its governing board, staff, agents, or employees, arising out of or in connection with any judgment or decision made in connection with the performance of the powers and duties under this Part, or for any inspections, safety engineering investigations performed, or recommendations made in good faith in any reports or in communications concerning employers due to their applying for or being provided insurance coverage by the corporation, or at any administrative hearing or inquiry conducted in connection with any insurance coverage by the corporation pursuant to the purposes and objectives of this Part.
Acts 1991, No. 814, §1; eff. Nov. 20, 1991; Acts 1992, No. 374, §1; Acts 1993, No. 564, §1, eff. June 10, 1993; Acts 1999, No. 855, §1, eff. Dec. 27, 1999; Acts 1999, No. 1256, §1, eff. July 12, 1999; Acts 2007, No. 459, §4, eff. Jan. 1, 2008; Acts 2008, No. 415, §2, eff. Jan. 1, 2009.