Louisiana Insurance Regulation

Series 106-from content outline

Individual Producer

Person required under this state’s laws to be licensed to sell, solicit, or negotiate insurance

Individual Producer Requirements

• 18 or older

• Place of business stays in Louisiana

• Passed licensing exam'

• Paid appropriate fees

• Has commissioner’s written consent

• Has not committed any act that is grounds for denial, suspension, or revocation. 

Nonresident Producer Qualifications

Someone licensed and in good standing with their home state, has submitted proper licensure requests and paid fees, has submitted the licensure application from their home state to the commissioner, and resides in a state that reciprocates nonresident licenses.

Uniform Application

Application for resident and nonresident producers regulated by the NAIC.

Nonresident Producer Who Moves

must file a change of address and provide certification from the new state within 30 days of legally changing their address.

Nonresident Business

must provide the Commissioner the name of every member, partner, officer, director, and person who directly controls 10% or more of the nonresident business entity upon request

CE Requirements for Nonresident Producers

these requirements are satisfied on a reciprocal basis with the other state after the producer relocates

Business Entity

corporation, association, partnership, limited liability company, limited liability partnership, pr other legal entity. If acting as a producer, they must obtain a producer license. 

Business Entity Regulations

Every member, officer, partner, or director must register with the Department of Insurance under the Business Entity’s license or if they control 10% or more of the business. Individuals selling must also have an individual producer license.

• Any change of licensing status must be reported to the commissioner within 30 days

• If another location opens the business must notify the commissioner within 30 days.

• Failure to comply with result in a $100 fine for each violation.

Nonresident Business Entity Requirements

Must provide the commissioner upon request with the name of every member, partner, officer, director, and person who controls, directly or indirectly, 10% or more of the nonresident business entity.

• Each person selling must be registered under the business entity’s license and must require an individual license for each line of insurance the business transacts.

Temporary License

license for 180 days without requiring examination for certain circumstances

Reasons for Temporary License

Selling the business, allowing time for a producer to return, or training for the listed purposes:

• Death of the business’ resident producer

• Producer entering active military duty

Can be appointed to the producer’s next of kin, employee, spouse, the producer’s administrator, or court appointed representative. 

Commissioner’s Role with the Temporary License

Can be given or taken as needed to ensure the safety of the public. A suitable sponsor may be given the roll of assuming responsibility for the temporary licensee.

Appointment

must be granted by the insurer in order for the agent to be listed as their producer.

Steps for Appointment

The insurer must file a notice of appointment within 15 days from the date the agency contract is executed. The commissioner must verify this within 30 days. If ineligible, the commissioner must notify the producer within 15 days of the determination.

• NO commission will be paid to a producer without proper appointment through the commissioner.

Termination of Appointment

Insurer must notify the commissioner within 30 days if the reason for termination is not licensing revocation, suspension, etc. Insurer must notify commissioner in 15 days if the termination is grounds for license suspension, revocation, etc or a court, organization, or governmental body found the producer engaged in activity that would cause revocation, suspension, etc.

Steps after Termination of Appointment

The insurer must mail a notice to the producer within 15 days and after 30 days the producer may file written comments about the notice with the producer. Comments must be sent to the insurer as well and all of this becomes a part of the commissioner’s files. 

Shared Commission

Must have express authorization to share a portion of commission and the insurer doing business in the state must be uniform in sharing across all classes of producers.

Shared Commission Violations

$1,000-$5,000 per violation or imprisoned for 2 years, or both. License will also be suspended or revoked. Commission CANNOT be paid to an unlicensed person. Violation fines from $2,000 to $50,000, imprisoned for 3 years, or both with a licensed revoked/suspended.

Expiration

takes place if fees are not paid and continuing education requirements are not met.

Renewal/Nonrenewal

Producer must file this application every 2 years notifying the commissioner of the intention to keep the license. $50 late for not applying on time. Continuing education requirements must be fulfilled.

Continuing Education Requirements

used to protect the public and maintain high standards of professional competency, as well as improve knowledge of insurance.

Property, Casualty, and Personal Line CE Requirements

Completed every 2 years. 24 hours with 3 hours dedicated to ethics and 4 hours dedicated to flood.

Adjuster CE Requirements

Completed every 2 years. 24 hours with 3 hours dedicated to ethics.

Bail Bond Producer CE Requirements

Completed every 2 years. 12 hours with 6 hours for bail enforcement

Title Producer CE Requirements

Completed every 2 years. 12 hours with 2 hours relating to state and federal consumer finance protection laws.

Failing to Complete CE

causes a lapse in licensing

Inactivity from Extenuating Circumstances or Military

Waiver may be requested for exams, procedures, or penalties for imposed noncompliance.

Change of Name, Address, or Telephone Number

must notify the commissioner within 30 days. Failure to notify will result in a $50 fin per violation. Once a notice of penalty is received, the license may apply for and is entitled to a hearing.

Assumed Names

Must notify the commissioner before doing this and a registration from the Secretary of State must accompany an application for a trade name. 

• Using nonapproved name will result in a $250 fine. If use continues 10 days after violation notice the fine increases to $5,000

Reporting of Actions

• any admin action taken against them in another jurisdiction of LA /government agency within 30 days of the matters’ final disposition. Legal documents must be submitted with the notice. 

• Any convection of felony charge or no contest plea or misdemeanor involving moral turpitude/public corruption within 30 days of a convection-documentation on indictment included.

Failure to Report Actions

License refusal, suspension or revocation. A fine up to $500 for each violation and not to exceed $10,000 per calendar year.

Hearings

Held by the Division of Administrative Law and brought on by the commissioner. Held for a requirement or provision of an insurance code or written demand.

Filing a Hearing

Must be filed by the aggrieved party to the commissioner within 30 days after the mailing of the notice to the aggrieved party. It must be specific with the laws involved and sent to the commissioner to review. The commissioner must send to the Division of Law within 5 days of receipt.

Hearings with the Division of Administrative Law

They must hold the hearing within 30 days after the receipt of the demand from the commissioner. It cannot be held later than 60 days from the original demand for the hearing, unless agreed upon by all parties. 

Notice of Hearing

issued by the Division of Administrative Law and if a person is entitled to a hearing the commissioner will issue a notice of wrongful conduct and site the laws violated. Hearings occur whether or not the persons attend. The person can be subpoenaed, and refusal can result in a $100-$2,000 fine

Cease and Desist Orders

given after a notice has been received from the commissioner siting wrongdoing and the person has not responded in 20 days. Findings, this order, and monetary penalties will be sent to the offender.

• $1,000 per violation up to $100,000 if the person was unaware of the violation

• $25,000 per violation up to $250,000 in a 6-month period if the person was aware of the violation

Solicit

attempting to sell insurance or urging a person to apply for a particular kind of insurance from a particular insurer

Sell

Exchanging a contract of insurance for money or its equivalent on behalf of an insurer

Negotiate

Conferring with or offering any advice to any purchaser, prospective purchaser, or enrollee regarding the specifics of an insurance contact. 

Solvency/Financial Requirements

Every insurer authorized to do business in LA must file a true statement of its financial condition, transactions, and affairs with the NAIC before March 1 of every year.

• Insurers must also file quarterly statements on May 15th, August 15th, and November 15th.

Records Maintenance

Every domesticated and redomesticated insurer must keep its record in good order so its financial condition, affairs, operations, filed financial statement, and compliance with the law can be easily verified.

• Original records must be maintained for at least 5 years or until the next exam is completed, whichever is a longer period.

• Fine of $5,000 for failure to maintain records

Policy Form Requirements

• Names of parties in the contract

• The subject of the insurance

• The risks insured against

• The insurance takes effect and its duration

• Premium

• Premium rate for policies other than life, health, or title

• The conditions

Policy Form Exceptions

All text must be at least 10-point font and each form including riders, endorsements, must be identified by a form number in the lower left-hand corner. *If the exact premium is determined at the termination or periodic intervals, the policy must include a statement on the rates upon which the final premium is to be determined and paid.

Controlled Business Definition

insurance written on the interests of the licensee, their immediate family, or their employer

Controlled Business Regulations

The Department if Insurance may not grant, renew, reinstate, etc. any license that has been or will solely be used to write controlled business. If 25% or more of your aggregate commissions are from controlled business, you license will be deemed this way.

Policy and Application Signatures

Electronic signatures can be used but must be agreed upon. If they agree once, it does not mean they agree every time and they can refuse. This right may not be waived by agreement.  

Misrepresentation

make or issue any estimate, illustration, statement, sales presentation, or comparison that:

• Misleads or misrepresents benefits, conditions, or terms of any policy

• Misleading representation to the financial condition of any insurer

• Misrepresents for the purpose of effecting a loan against a policy or inducing a policy holder to lapse or forfeit their policy.

• Makes false/fraudulent statements on an application to obtain a fee commission, money, or benefit from another person.

False or Deceptive Advertising

making, publishing, or placing before the public a deceptive or misleading advertisement, announcement, or statement with respect to the business of insurance or to any person in the conduct of the insurance business.

Defamation

any false statement maliciously critical of, or derogatory to, any insurer’s financial condition with the intent to injure someone in the insurance business.

Boycott, Coercion, or Intimidation

entering into any agreement of action resulting in an unreasonable restraint of, or monopoly in, the insurance business is an unfair trade practice. EX: making an insurance purchase from a particular source under the condition that the individual purchases another insurance policy.

False Financial Statements

knowingly filing, delivering, or placing before the public any false material statement about an insurer’s financial condition. 

Unfair Discrimination

favoring a person over another with the same risk factors and are in the same class. EX: charged different rates for the same coverage, received different benefits, and having different terms and conditions.

Also including refusing to insure, renew, or limiting coverage because of property age, sex, religion, race, mental or physical disability of an applicant or insured, geographical location, or having another insurer cancel a policy or refuse to write a new one in which the applicant was the NI.

Rebating

offering any rebate, premium discount, advantage, or valuable consideration not specified in the policy is prohibited.

Twisting

making any misleading representation or incomplete or fraudulent comparison of any insurance policies to insurers for the purpose of inducing or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or take out a policy of insurance with another insurer.

Unfair Claims Settlement Practices

• Misrepresenting pertinent facts regarding coverage

• Failure to react promptly to claims

• Refusing to pay claims without reasonable investigation

• Failure to affirm or deny coverage of claims after proof of loss submitted

• (Page 17 to read the rest)

Insurance Fraud Definition

committed by a person who plans to defraud an insurer, producer, or any agent by knowingly using false or misleading statements about an application, rating of a policy, a claim payment or benefit pursuant to any insurance policy, premiums paid, the financial condition of an insurer or reinsurer, and the acquisition of any insurer or reinsurer

Division of Insurance Fraud

conducts investigations and background checks on each applicant for a license or certificate of authority to transact insurance. Has the power to administer oaths, serve subpoenas, and collect evidence for fraud claims or violations of LA law.

Fraud Disciplinary Actions

fines up to $5,000, imprisoned for 5 years, or both per violation. If the benefit affected by the act does not exceed $1,000 the max sentences is 6 months, and the fines will not exceed $1,000 per violation. Fraudulent insurance proof of insurance card is punishable by a $500 fine, 6 months in prison, or both.

Privacy of Consumer Financial Information

The rule regulates the handling of nonpublic financial information about individuals who are claimants or beneficiaries or who obtain products or services primarily for personal, family, or household purposes from the Department’s licensees.

Privacy of Consumer Financial Information Regulations

Requires licensee to provide notice to individuals about its privacy policies and practices, lists conditions under which a licensee may disclose nonpublic personal financial information about individuals to affiliates and nonaffiliated third parties, and provides methods for individuals to prevent a licensee from disclosing that information.

Nonpublic Personal Financial Information

personally identifiable financial information, includes lists or groupings of consumers derived from personally identifiable financial information, and does not include health information.