§ 22:1570 — Limitation on termination of independent insurance producers

Louisiana § 22:1570

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

§1570. Limitation on termination of independent insurance producers
A.(1) For the purposes of this Section, "captive insurance producer" means:
(a) Any licensed insurance producer whose agency contract with an insurance
company requires the insurance producer to act exclusively as an agent only for that
insurance company or group of insurance companies under common ownership.
(b) A licensed insurance producer whose contract with an insurance company
prohibits the producer from selling competitors' products that are the same or similar to
products sold by the insurer, but allows the producer to sell other products that do not
directly compete with products sold by the insurer.
(2) For purposes of this Section, "non-captive insurance producer" means any
licensed insurance producer whose agency contract with an insurance company establishes
the insurance producer as an independent contractor with the ability to represent more than
one insurance company.
B.(1) No admitted insurance company which is authorized to do business in this state
shall terminate the appointment or the agency contract of a non-captive insurance producer
without the mutual agreement of the parties in writing at the time of the termination of the
agency agreement or without providing at least one hundred eighty days' advance written
notice, except when the termination is for one of the following reasons which shall constitute
"cause" for which an insurer may terminate a producer's appointment without providing such
notice:
(a) Loss of license.
(b) Cause as set forth in R.S. 22:1554.
(c) Nonpayment of insurance company premiums due and not in dispute by the
producer.
(d) Withdrawal of the insurance company from this state.
(e) Violation of any state or federal law or regulation, or violation of any provision
of the insurer's contract with the producer that would potentially cause the insurer to be in
violation of such laws or regulations.
(f) Commission of any dishonest or fraudulent act.
(g) Gross or willful misconduct or negligence by the producer.
(h) Submission of any document bearing a false or unauthorized signature or
containing falsified information.
(i) Failure to maintain the agent's professional liability coverage required in the
agency contract and as required in R.S. 22:1570.1.
(j) Change in the ownership of the insurance agency.
(2) For purposes of this Section, a reasonable belief by the insurer that any such
action has occurred is sufficient to be considered as cause as defined in this Subsection.
C.(1)(a) Any admitted insurance company which is authorized to do business in this
state shall, upon issuing the written notice required in Subsection B of this Section of the
termination or cancellation of a non-captive insurance producer's contract, permit the renewal
of all contracts of insurance written by the non-captive insurance producer until the
producer's contract is terminated, subject to the normal underwriting requirements of the
insurer.
(b) If the insured fails to meet the current underwriting requirements of the insurer,
the insurer shall provide the policyholder with the statutory notice of nonrenewal.
(2) Any insurer renewing contracts of insurance in accordance with this Section shall
pay commissions for the renewals to the terminated or cancelled non-captive insurance
producer in the same amount and manner as previously paid to the non-captive insurance
producer under the terminated or cancelled contract.
D. The provisions of this Section shall not apply to:
(1) A captive insurance producer.
(2) Insurance companies whose agency contract contains a written provision
expressly reserving to the insurer all right, title, and interest to the ownership or use of
business written by the insurance producer.
(3) Nonadmitted, excess, or surplus lines insurance policies.
(4) Individually rated excess insurance policies.
(5) Non-captive producers writing life, annuity, and health insurance policies.

Legislative History

Acts 2016, No. 142, §1; Acts 2017, No. 380, §1.