§ 12:1856 — Requirements; excess insurance; administrative and service companies; status;

Louisiana § 12:1856

• Jurisdiction: Louisiana
• Title 12: Conservation of Cultural Resources

Text

§1856. Requirements; excess insurance; administrative and service companies; status;
liability; refunds
A. The fund established pursuant to this Chapter shall comply with all of the
following items:
(1) File rates in accordance with R.S. 12:1860 and maintain at least seven hundred
fifty thousand dollars in earned premiums in the first fund year. In the second and each
subsequent year, the fund shall maintain at least two million dollars in earned premiums. The
amounts maintained shall be documented on the fund's audited financial statement prepared
in accordance with generally accepted accounting principles.
(2)(a) During the first fund year, the fund shall deposit with the department a
safekeeping receipt or trust receipt from a bank doing business in this state or from a savings
and loan association chartered to do business in the state indicating that the fund has
deposited and pledged one hundred thousand dollars in money or bonds of the United States,
the state of Louisiana, or any political subdivision of the state, having a par value of one
hundred thousand dollars, or post a surety bond issued by a corporate surety authorized to
do business in this state, in the amount of one hundred thousand dollars, to secure the
obligations of the fund as required by this Chapter.
(b) In the second and subsequent fund years, the fund shall deposit with the
department a safekeeping receipt or trust receipt from a bank doing business in this state or
from a savings and loan association chartered to do business in this state indicating that the
fund has deposited and pledged two hundred fifty thousand dollars in money or bonds of the
United States, the state of Louisiana, or any political subdivision of the state, having a par
value of two hundred fifty thousand dollars, or post a surety bond issued by a corporate
surety authorized to do business in this state, in the amount of two hundred fifty thousand
dollars, to secure the obligations of the fund as required by this Chapter.
(3) Provide property coverage as required by this Chapter.
(4)(a) Maintain, on a fund-year basis, a contract or contracts of specific excess
insurance or reinsurance of not less than an amount that is actuarially sound and approved
by the department. The maximum retention under the excess insurance or reinsurance
contracts shall not exceed amounts as may be provided by the department.
(b) For purposes of authorizing the purchase of reinsurance as required by this
Subsection, the fund shall be deemed an insurer. The excess insurance or reinsurance shall
be purchased only from a company having a rating of A- by A.M. Best Rating Services, Inc.,
A- by Fitch Ratings, A by Weiss Ratings, A- by S&P Global Ratings, or A3 by Moody's
Investors Service, or better, and this reinsurance may be purchased from admitted or
nonadmitted companies, provided that the provisions of R.S. 22:651 through 661, and
Financial Accounting Standard Number 113 as promulgated and updated by the Financial
Accounting Standards Board. The department shall approve all excess insurance policies or
reinsurance agreements prior to use by the fund.
(5) File with the department financial statements and financial reports, including
financial statements audited by an independent certified public accountant and actuarial
reports, as may be required by the department under rules promulgated pursuant to the
Administrative Procedure Act.
B. In order for a casualty insurance company to be eligible to write excess coverage
for the fund, the company shall have on file with the department its current financial
statement showing assets, including any surplus to policyholders, at least equal to the current
requirements by the department for admission of a new company to do business in this state.
Contracts or policies for excess insurance coverage written by active underwriters of Lloyd's
of London are acceptable upon prior approval by the department.
C. Any fund administrator contracted by the fund and whose acts are not covered by
the fund's bond, errors and omissions insurance, directors' and officers' liability insurance,
or other security approved by the department, and any person, including an individual,
partnership, corporation, and other entity contracting, either directly or indirectly, with a fund
to provide claims adjusting, underwriting, safety engineering, loss control, marketing,
investment advisory, or administrative services to the fund or its membership, other than
bookkeeping, or auditing, or claims investigation services to the fund, shall comply with all
of the following:
(1) Post a surety bond with the department issued by a corporate surety authorized
to do business in this state of not less than fifty thousand dollars or deposit with the
department a safekeeping receipt or trust receipt from a bank doing business in this state or
from a savings and loan association chartered to do business in this state indicating that the
deposit of fifty thousand dollars in money or bonds of the United States, the state of
Louisiana, or any political subdivision of the state, having a par value of fifty thousand
dollars, to secure the performance of its obligations under the contract and pursuant to this
Chapter.
(2) Place all terms, agreements, fee arrangements, and any other conditions in a
written agreement, which constitute the entire agreement between the parties, signed by the
person and the fund.
D. A fund created pursuant to this Chapter shall not be considered a partnership
under the laws of this state.
E. All members of the fund are solidarily liable for liabilities of the fund incurred by
the fund after the inception of the fund year in which the operator becomes a member of the
fund, to the extent required by this Chapter.
F. The board of trustees may declare, as refundable to fund members, any monies in
excess of amounts necessary to fulfill obligations of the fund. The board of trustees may
distribute the refund at its discretion, in accordance with the agreement establishing the fund
and the following conditions:
(1) The amount of the distribution shall not exceed the members' distributions
payable and recorded on the balance sheet as indicated by the most recently completed
audited financial statements of the fund.
(2) The fund shall provide written notification to the department at least ten days
before the payment of a distribution.
G. Each application for membership in the fund shall contain written notice that the
fund is not covered by the Louisiana Guaranty Insurance Association.

Legislative History

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.