§1892.2. Catastrophic loss claims settlement practices; penalties and attorney fees
A.
(1)An insurer shall not violate any provision of this Section or R.S. 22:1892(A)(4)
or (I).
(2)For catastrophic losses arising under an insurance policy for residential property,
an insurer shall transmit payment of the amount of any claim due to any insured within sixty
days after receipt of satisfactory written proof of loss.
(3)For catastrophic losses arising under an insurance policy for immovable property,
other than residential property, an insurer shall transmit payment of the amount of any claim
due to any insured within ninety days after receipt of satisfactory written proof of loss. The
timeline provided for in this Paragraph may be extended up to thirty additional days by the
commissioner fo
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§1892.2. Catastrophic loss claims settlement practices; penalties and attorney fees
A.(1) An insurer shall not violate any provision of this Section or R.S. 22:1892(A)(4)
or (I).
(2) For catastrophic losses arising under an insurance policy for residential property,
an insurer shall transmit payment of the amount of any claim due to any insured within sixty
days after receipt of satisfactory written proof of loss.
(3) For catastrophic losses arising under an insurance policy for immovable property,
other than residential property, an insurer shall transmit payment of the amount of any claim
due to any insured within ninety days after receipt of satisfactory written proof of loss. The
timeline provided for in this Paragraph may be extended up to thirty additional days by the
commissioner for commercial policies insuring multiple locations.
B.(1) Failure to comply with Subsection A of this Section, when the failure is found
to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty
payable to the insured, in addition to the amount of the loss, of only the greater of fifty
percent of the amount found to be due from the insurer to the insured, or in the event that a
partial payment or tender has been made, fifty percent of the difference between the amount
timely paid or tendered and the amount found to be due, plus proven economic damages
sustained as a result of the breach, or two thousand five hundred dollars, whichever is
greater, together with, in either instance, reasonable attorney fees and costs actually incurred.
The penalties, if awarded, shall not be used by the insurer in computing either past or
prospective loss experience for the purpose of setting rates or making rate filings.
(2) Claims for penalties and attorney fees pursuant to this Section are subject to a
liberative prescription of two years.
C.(1) As a condition precedent to bringing an action pursuant to this Section, the
insurer shall be given sixty days' written notice of the violation by the insured or his
representative, hereinafter referred to in this Section as the "cure period notice".
(2) The cure period notice may be provided through either a form transmitted by the
department or by formal written demand providing sufficient notice of the facts and
circumstances of the dispute.
(3) If the insurer pays within sixty days after the insurer receives a cure period notice
the full amount alleged to be due in the notice, together with any actual expenses incurred
by the insured and claimed in the notice, including any attorney fees, not to exceed twenty
percent of the amount alleged to be due under the policy, there shall be no further cause of
action pursuant to this Section regarding that noticed demand.
(4) If the insurer does not pay the full amount demanded by the cure period notice
as provided for in Paragraph (3) of this Subsection but does make a partial payment within
sixty days of the insurer's receipt of the cure period notice, the penalty otherwise due, if any,
on the amount actually paid by the insurer within sixty days of the insurer's receipt of the
cure period shall be reduced by half.
(5) The insurer that is the recipient of a cure period notice shall respond to the
insured or his representative within sixty days.
(6) If a cure period notice is transmitted within the last ninety days prior to the
running of prescription, the applicable prescriptive period for an action filed pursuant to the
provisions of this Section, or for an action concerning the underlying policy dispute, shall be
suspended for a period until thirty days after the insurer transmits its written response to the
cure period notice.
(7) If any suit is filed prior to transmitting the cure period notice required by this
Subsection, it shall be automatically stayed until sixty days after the cure period notice is
received. The delay for answering any suit shall automatically be extended until thirty days
after the end of the cure period. If the insurer timely pays the full amount demanded as
provided for in Paragraph (3) of this Subsection, any cause of action prematurely filed shall
be subject to dismissal at the insured's cost.
D.(1) An insurer may make additional requests for information or inspection if
during its investigation of the claim the additional requests are considered necessary. A
request for information that is in the possession of the insurer or its representatives shall not
extend any of the insurer's deadlines.
(2) Nothing in this Subsection shall be construed to relieve an insurer of its
obligation to transmit payment of the amount of any claim due to any insured within the
deadline following receipt of satisfactory proof of loss concerning the amount as set forth in
Paragraphs (A)(2) and (3) of this Section, nor to extend any deadline for payment when the
requested information or inspection is found by the trier of fact to be unnecessary considering
all other proof of the loss then available to the insurer.
(3) Nothing in this Subsection shall be construed to prohibit an insured from making
a supplemental claim, nor to relieve an insurer from the obligation to conduct a supplemental
investigation, or to make a supplemental payment, if warranted by the facts of a supplemental
claim. A supplemental claim adds newly found damage or additional costs to the original
claim. The fact that an insurer makes a supplemental payment shall not itself be construed
as evidence of a violation of this Section or R.S. 22:1892.
(4) An insurer's tender of undisputed additional amounts due to the insured within
thirty days of the insurer's receipt of a valid appraisal award does not itself constitute
evidence of bad faith on the part of the insurer.
E. The provisions of this Section do not apply to claims made under any type of
policy or contract of insurance specified in R.S. 22:1811 or 1821 or Chapter 10 of this Title.
F. The Louisiana Insurance Guaranty Association, as provided in R.S. 22:2051 et
seq., and the Louisiana Citizens Property Insurance Corporation, as provided in R.S. 22:2291
et seq., shall not be subject to the provisions of Code of Civil Procedure Article 591 et seq.,
or any other provision allowing a class action, for any damages, that includes any penalties
awarded pursuant to the provisions of this Section. The Louisiana Insurance Guaranty
Association, as provided in R.S. 22:2051 et seq., shall also not be liable for any special
damages or penalties provided for in this Section. The Louisiana Citizens Property Insurance
Corporation, as provided in R.S. 22:2291 et seq., shall not be liable for general damages,
special damages, or penalties in excess of the policy's limit; however, this Subsection does
not limit the Louisiana Citizens Property Insurance Corporation from paying legal interest
due from breach or reasonable attorney fees and costs when otherwise provided by this
Section.