§ 22:1267 — Commercial insurance; cancellation and renewal

§1267. Commercial insurance; cancellation and renewal
A. This Section shall apply to commercial property insurance policies, commercial
automobile insurance policies, commercial multi-peril insurance policies, workers'
compensation insurance, professional errors and omissions policies, and commercial liability
insurance policies, other than aviation and employers' liability insurance policies. It shall not
apply to reinsurance, excess and surplus lines insurance, residual market risks, multistate
location risks, policies subject to retrospective rating plans, excess or umbrella policies, and
such other policies that are exempted by the commissioner of insurance.
B. For the purposes of this Section, the following terms shall mean:
(1) "Cancellation" means termination of a policy at a date other than its expiration
date.
(2) "Expiration date" means the date upon which coverage under a policy ends. It
also means, for a policy written for a term longer than one year or with no fixed expiration
date, each annual anniversary date of such policy.
(3) "Nonpayment of premium" means the failure or inability of the named insured
to discharge any obligation in connection with the payment of premiums on a policy of
insurance subject to this regulation, whether such payments are payable directly to the insurer
or its producer or indirectly payable under a premium finance plan or extension of credit.
(4) "Nonrenewal" means termination of a policy at its expiration date.
(5) "Renewal" or "to renew" means the issuance of or the offer to issue by the insurer
a policy succeeding a policy previously issued and delivered by the same insurer or an insurer
within the same group of insurers, or the issuance of a certificate or notice extending the term
of an existing policy for a specified period beyond its expiration date.
C.(1) If coverage has not been in effect for sixty days and the policy is not a renewal,
cancellation shall be effected by mailing or delivering a written notice to the first-named
insured at the mailing address shown on the policy at least sixty days before the cancellation
effective date, except in cases where cancellation is based on nonpayment of premium.
Notice of cancellation based on nonpayment of premium shall be mailed or delivered at least
ten days prior to the effective date of cancellation. After coverage has been in effect for more
than sixty days or after the effective date of a renewal policy, no insurer shall cancel a policy
unless the cancellation is based on at least one of the following reasons:
(a) Nonpayment of premium.
(b) Fraud or material misrepresentation made by or with the knowledge of the named
insured in obtaining the policy, continuing the policy, or in presenting a claim under the
policy.
(c) Activities or omissions on the part of the named insured which change or increase
any hazard insured against, including a failure to comply with loss control recommendations.
(d) Change in the risk which increases the risk of loss after insurance coverage has
been issued or renewed, including an increase in exposure due to regulation, legislation, or
court decision.
(e) Determination by the commissioner of insurance that the continuation of the
policy would jeopardize a company's solvency or would place the insurer in violation of the
insurance laws of this state or any other state.
(f) Violation or breach by the insured of any policy terms or conditions.
(g) Other reasons that are approved by the commissioner of insurance.
NOTE: Subparagraph (C)(2)(a) eff. until July 1, 2026. See Acts 2025, No. 182.
(2)(a) A notice of cancellation of insurance coverage by an insurer shall be in writing
and shall be mailed or delivered to the first-named insured at the mailing address as shown
on the policy. Notices of cancellation based on R.S. 22:1267(C)(1)(b) through (g) shall be
mailed or delivered at least thirty days prior to the effective date of the cancellation; notices
of cancellations based upon R.S. 22:1267(C)(1)(a) shall be mailed or delivered at least ten
days prior to the effective date of cancellation. The notice shall state the effective date of the
cancellation.
NOTE: Subparagraph (C)(2)(a) eff. July 1, 2026. See Acts 2025, No. 182.
(2)(a) A notice of cancellation of insurance coverage by an insurer shall be in writing
and shall be mailed or delivered to the first-named insured at the mailing address as shown
on the policy. Notices of cancellation based on Subparagraphs (1)(b) through (g) of this
Subsection shall be mailed or delivered at least sixty days prior to the effective date of the
cancellation. Notices of cancellations based upon Subparagraph (1)(a) of this Subsection
shall be mailed or delivered at least ten days prior to the effective date of cancellation. The
notice shall state the effective date of the cancellation.
(b) The insurer shall provide the first-named insured with a written statement setting
forth the reason for the cancellation where the insured requests such a statement in writing
and the named insured agrees in writing to hold the insurer harmless from liability for any
communication giving notice of or specifying the reasons for a cancellation or for any
statement made in connection with an attempt to discover or verify the existence of
conditions which would be a reason for cancellation under this regulation.
(3) An insurer shall provide a notice of cancellation or a statement of reasons for
cancellation where cancellation for nonpayment of premium is effected by a premium finance
company or other entity pursuant to a power of attorney or other agreement executed by or
on behalf of the insured.
D.(1) An insurer may decide not to renew a policy if it delivers or mails to the first-named insured at the address shown on the policy written notice it will not renew the policy.
Such notice of nonrenewal shall be mailed or delivered at least sixty days before the
expiration date. Such notice to the insured shall include the insured's loss run information
for the period the policy has been in force within, but not to exceed, the last three years of
coverage. If the notice is mailed less than sixty days before expiration, coverage shall remain
in effect under the same terms and conditions until sixty days after notice is mailed or
delivered. Earned premium for any period of coverage that extends beyond the expiration
date shall be considered pro rata based upon the previous year's rate. For purposes of this
Section, the transfer of a policyholder between companies within the same insurance group
shall not be a refusal to renew. In addition, changes in the deductible, changes in rate,
changes in the amount of insurance, or reductions in policy limits or coverage shall not be
refusals to renew.
(2) Notice of nonrenewal shall not be required if the insurer or a company within the
same insurance group has offered to issue a renewal policy, or where the named insured has
obtained replacement coverage or has agreed in writing to obtain replacement coverage.
(3) If an insurer provides the notice described in Paragraph (1) of this Subsection and
thereafter the insurer extends the policy for ninety days or less, an additional notice of
nonrenewal is not required with respect to the extension.
NOTE: Paragraph (E)(1) eff. until July 1, 2026. See Acts 2025, No. 182.
E.(1) An insurer shall mail or deliver to the named insured at the mailing address
shown on the policy written notice of any rate increase, change in deductible, or reduction
in limits or coverage at least thirty days prior to the expiration date of the policy. If the
insurer fails to provide such thirty-day notice, the coverage provided to the named insured
at the expiring policy's rate, terms, and conditions shall remain in effect until notice is given
or until the effective date of replacement coverage obtained by the named insured, whichever
first occurs. For the purposes of this Subsection, notice is considered given thirty days
following date of mailing or delivery of the notice. If the insured elects not to renew, any
earned premium for the period of extension of the terminated policy shall be calculated pro
rata at the lower of the current or previous year's rate. If the insured accepts the renewal, the
premium increase, if any, and other changes shall be effective the day following the prior
policy's expiration or anniversary date.
NOTE: Paragraph (E)(1) eff. July 1, 2026. See Acts 2025, No. 182.
E.(1) An insurer shall mail or deliver to the named insured at the mailing address
shown on the policy written notice of any rate increase, change in deductible, or reduction
in limits or coverage at least sixty days prior to the expiration date of the policy. If the
insurer fails to provide such notice, the coverage provided to the named insured at the
expiring policy's rate, terms, and conditions shall remain in effect until notice is given or
until the effective date of replacement coverage obtained by the named insured, whichever
first occurs. For the purposes of this Subsection, notice is considered given sixty days
following date of mailing or delivery of the notice. If the insured elects not to renew, any
earned premium for the period of extension of the terminated policy shall be calculated pro
rata at the lower of the current or previous year's rate. If the insured accepts the renewal,
the premium increase, if any, and other changes shall be effective the day following the prior
policy's expiration or anniversary date.
(2) This Subsection shall not apply to the following:
(a) Changes in a rate or plan filed with the commissioner of insurance and applicable
to an entire class of business.
(b) Changes based upon the altered nature or extent of the risk insured.
(c) Changes in policy forms filed and approved with the commissioner and
applicable to an entire class of business.
(d) Changes requested by the insured.
F. Proof of mailing of notice of cancellation, or of nonrenewal or of premium or
coverage changes, to the named insured at the address shown in the policy, shall be sufficient
proof of notice.
G.(1) An insurance premium finance company that finances any part of an insurance
policy governed by this Section shall cooperate with the department in any investigation
regarding such insurance policy.
(2) Upon request by the department, the insurance premium finance company shall
make available to the department all documents, correspondence, and cancellation notices
related to the insurance policy that have been received or sent by the insurance premium
finance company.
(3) An insurance premium finance company that violates any provision of this
Section shall be subject to the monetary penalties provided for in R.S. 22:13(A).
NOTE: Former R.S. 22:1267 redesignated as R.S. 22:441 by Acts 2008, No.
415, §1, eff. Jan. 1, 2009.

Legislative History

Acts 1987, No. 776, §1; Acts 1988, No. 677, §1; Acts 1991, No. 608, §1; Acts 1991, No. 798, §1; Acts 1993, No. 563, §1; Acts 2001, No. 1052, §1; Acts 2007, No. 459, §4, eff. Jan. 1, 2008; Redesignated from R.S. 22:636.4 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 106, §1; Acts 2010, No. 703, §1, eff. Jan. 1, 2011; Acts 2015, No. 37, §1; Acts 2025, No. 182, §1, eff. July 1, 2026.