§ 22:1562 — Prohibited acts

Louisiana § 22:1562

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

§1562. Prohibited acts
A.(1) No insurer or insurance producer shall pay any money or commission or
brokerage, or give or allow any valuable consideration or compensation to any person or
business entity not duly licensed as an insurance producer, nor to an insurer not licensed to
do business in this state, for or because of service rendered or performed in this state in
selling, soliciting, negotiating, or effecting a contract of insurance on any property or risks,
or insurable interests, or business activities located within or transacted within this state. The
prohibition of this Subsection shall not apply with respect to any contract of reinsurance.
(2) The prohibition of this Subsection shall not apply to the distribution of profits to
the owners of an insurance agency business entity licensed as a producer if the business
entity has complied with the provisions of R.S. 22:1546(B) and the owners are not persons
to whom either of the following applies:
(a) Been convicted or pleaded nolo contendere to any felony, participated in a pretrial
diversion program pursuant to a felony charge, suspension and deferral of sentence, and
probation pursuant to Code of Criminal Procedure Article 893, or been convicted of any
misdemeanor involving moral turpitude or public corruption.
(b) Had an insurance producer license revoked or suspended.
(3) The prohibitions of this Subsection shall not apply to the distribution of profits
to the owner of an insurance agency business entity licensed as a producer if the owner has
either one of the following:
(a) The written consent or a waiver from the commissioner pursuant to 18 U.S.C.
1033 to engage in the business of insurance.
(b) An individual insurance producer license issued subsequent to any plea or
conviction described in Subparagraph (2)(a) of this Subsection.
(4) The provisions of Paragraph (2) of this Subsection shall not apply to the
Louisiana Workers' Compensation Corporation.
B.(1) Whoever violates this Section shall, upon conviction, be fined not less than two
thousand dollars, nor more than fifty thousand dollars, or imprisoned with or without hard
labor, for not more than three years, or both.
(2) Any conviction for violation of this Section shall constitute grounds for the
immediate suspension or revocation by the commissioner of insurance of the license of such
insurance producer to sell insurance, in addition to those grounds set forth in R.S. 22:1554.
C.(1) It shall be unlawful for any person or business entity, without conforming to
the provisions of this Part, directly or indirectly, to represent himself or itself to be an
insurance producer or limited lines producer, or to solicit, negotiate, or effect any contract
of insurance or renewal thereof, or to attempt to effect the same on any property, or risk or
insurable interests or business activities, located within or transacted within this state. This
Subsection shall not apply to:
(a) The clerical duties of office employees not involved in soliciting insurance.
(b) Employees of insurers who solicit insurance only for or in conjunction with
licensed insurance producers compensated on a commission basis.
(c) The collection of premiums by secretarial or clerical employees of a licensed
insurance producer, or other person so authorized by a licensed insurance producer.
(d) Employees of insurers who do not solicit insurance but are authorized by their
employer to sign policies of insurance.
(2) Wherever the commissioner of insurance determines that a violation of Paragraph
(1) of this Subsection has occurred, whether that violation be intentional or not, the
commissioner or his designee is hereby authorized to issue an order to cease and desist from
the violations complained of, and the commissioner is hereby authorized to seek injunctive
relief from the district court of the district in which the violation may have occurred or in any
proper venue authorized under the Code of Civil Procedure.
D.(1) No person licensed as, or representing himself to be, an insurance producer
shall receive anything of value as premium payment or commission for an insurance policy
rider, binder, or plan without making a bona fide application to an insurer for an insurance
policy.
(2) No person licensed as, or representing himself to be, an insurance producer shall
fail to account for or remit any premiums, monies, or properties belonging to another which
come into the possession of the applicant in the course of doing insurance business, or
improperly withholding, misappropriating, converting, or failing to timely remit any
premiums, monies, or properties received in the course of doing insurance business, whether
such premiums, monies, or properties belong to policyholders, insurers, beneficiaries,
claimants, or others.
E.(1) It shall be unlawful for any insurance producer, directly or indirectly, to collect
any insurance premium payment, or compensation, or to solicit, negotiate, effect, procure,
receive, or forward any contract of insurance or renewal thereof, in relation to any property
or risk or insurable interest in this state, for any insurer not lawfully authorized to transact
business in this state, or in any manner to aid or assist in any such transaction, except through
licensed surplus lines brokers.
(2) Except as provided in Paragraph (3) of this Subsection, any person shall be liable
for the full amount of any loss sustained on any contract of insurance made by or through
him or it, directly or indirectly, with any insurer not lawfully authorized to transact business
in this state, and for any taxes which may become due under any law of this state by reason
of such contract. For purposes of this Section, any surplus lines insurer which is approved
by the commissioner shall be considered lawfully authorized to transact business in this state.
(3) Any licensed producer who writes a policy through a licensed surplus lines
broker shall not be liable for any losses or taxes as provided for in this Section.
(4) Any person or business entity found to have violated this Subpart shall be
deemed to have engaged in unfair trade practices and shall be subjected to the penalties
provided herein. Additionally, any person found to have knowingly and intentionally
violated any provisions of this Subsection shall be guilty of a felony and shall be subjected
to a term of imprisonment, with or without hard labor, not to exceed five years, on each
count, and each day on which a violation of this Subsection occurs shall be considered a
separate violation.
F. It shall be unlawful for any producer to sign any policy of insurance endorsement
in blank.
G. Repealed by Acts 2001, No. 1158, §3.
H. No insurer or producer shall accept or process an application for coverage under
a Medicare+Choice plan unless the following requirements are met:
(1) The Medicare enrollee or his authorized representative has signed the application
for coverage.
(2) The Medicare enrollee is provided a written notice upon transfer from one
approved Medicare+Choice plan to another stating that his coverage is being transferred.
Such notice shall also state how the change in coverage will impact the Medicare enrollee's
access to health care providers, including specifying any known change in health care
providers available to provide care.
(3) The Medicare enrollee is provided a written notice upon plan cancellation of his
current Medicare+Choice coverage that clearly states the date his coverage ends.
(4) The Medicare enrollee is notified of any known change in health care providers
that may reasonably result from the action of the producer.

Legislative History

Acts 2001, No. 158, §1, eff. Jan. 1, 2002; Acts 2001, No. 275, §1, eff. June 1, 2001; Acts 2001, No. 1158, §§1 and 3; Redesignated from R.S. 22:1148 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2011, No. 94, §1, eff. Jan. 1, 2012; Acts 2016, No. 315, §1, eff. June 2, 2016; Acts 2018, No. 127, §1.