§ 22:203 — Funds

Louisiana § 22:203

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

A. All funds of every association operating under this Subpart shall be deposited with one or more insured banks doing business in the state of Louisiana. Two separate funds shall be maintained by each association, one to be known and designated with the depository as a general fund and the other to be known and designated with the depository as a reserve fund. The reserve fund shall not exceed the deposit amount insured by the Federal Deposit Insurance Corporation (FDIC) in any one institution.
B. All funds of any association, except its reserve fund, shall be deposited in the general fund and may be withdrawn only by check or voucher for the purpose of paying benefits for policyholders and expenses authorized by the provisions of this Subpart.
C. Ten percent of the aggregate amount received from each assessment shall be deposited in a reserve fund until a reserve of ten thousand dollars is accumulated. Nothing contained herein shall prevent the accumulation of larger reserves if desired. Said reserve fund may not be used for any purpose except at the direction of the commissioner of insurance upon the liquidation or dissolution of the association or its merger with another association, or unless an emergency exists which makes it necessary or advisable to withdraw part of the reserve for the purpose of paying benefits for policyholders, in which event the withdrawal of such parts thereof as may be necessary to meet the emergency may be authorized by the commissioner of insurance and made for said purpose upon satisfactory provisions for the reaccumulation of the reserve so withdrawn. Any association may accept any gift or donation inter vivos or mortis causa provided the same does not create any obligation upon the association, and unless otherwise designated by the donor, the proceeds of such gift or donation shall be deposited in the general fund of the association.
D. No money may be borrowed by the association and the assets of the association may not be pledged for any purpose. Except as hereinafter authorized, the funds of the association may not be loaned for any purpose. The reserve fund of the association may only be invested in bonds of the state of Louisiana, the United States of America, or cash, and deposited with a bank authorized to do business in the state of Louisiana, with a safekeeping or trust receipt from the bank deposited with the commissioner of insurance.

Legislative History

Acts 1958, No. 125. Amended by Acts 1981, No. 856, §1; Acts 1993, No. 784, §1; Redesignated from R.S. 22:343 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.