§ 22:2059 — Plan of operation

§2059. Plan of operation
A.(1) The association shall submit to the commissioner, the Senate Committee on
Insurance, and the House Committee on Insurance a plan of operation and any amendments
thereto necessary or suitable to assure the fair, reasonable, and equitable administration of
the association. The plan of operation and any amendments thereto shall become effective
upon approval in writing by the commissioner; however, prior to the implementation of any
new plan or any amendment to such new plan or an existing plan of operation, the Senate
Committee on Insurance and the House Committee on Insurance may hold a hearing on such
new plan or any amendments to a new or existing plan of operation. After a hearing, if any,
the respective legislative committees shall either approve or reject the plan or amendment
as presented. No plan or amendment shall be implemented if it was rejected by a legislative
committee. If a hearing is not held within thirty days after receipt of the plan or amendment
by such committees, then the plan or amendment may be implemented as approved by the
commissioner. Approval by the commissioner shall not be unreasonably withheld. If the
plan of operation is disapproved in whole or in part, the commissioner shall provide written
reasons as to each disapproved part, and the association shall resubmit the part of the plan
which has been disapproved by the commissioner within thirty days thereafter. The
preceding plan of operation shall remain in effect until such time as the revised plan is
effective.
(2) If the association fails to submit suitable amendments to the plan, the
commissioner shall, in accordance with the Administrative Procedure Act, adopt and
promulgate such reasonable rules as are necessary or advisable to effectuate the provisions
of this Part. Such rules shall continue in force until modified by the commissioner or
superseded by a plan submitted by the association and approved by the commissioner. All
rules and regulations promulgated by the commissioner under the provisions of this
Paragraph shall have no effect until they are reviewed and approved by the Senate Committee
on Insurance and the House Committee on Insurance. If a hearing is not held by such
committees within thirty days after receipt of the rules and regulations promulgated by the
commissioner under the provisions of this Paragraph, then the rules and regulations may be
implemented as promulgated by the commissioner.
B. All member insurers shall comply with the plan of operation.
C. The plan of operation shall:
(1) Establish procedures for performing the powers and duties of the association.
(2) Establish procedures for handling assets of the association.
(3) Establish procedures for reimbursing the members of the board of directors for
reasonable expenses.
(4) Establish procedures by which claims may be filed with the association and
establish acceptable forms of proof of covered claims.
(5) Establish regular places and times for meetings of the board of directors.
(6) Establish procedures for records to be kept of all financial transactions of the
association, its agents, and the board of directors. All such records shall be subject to review
by either or both the Senate Committee on Insurance and the House Committee on Insurance
upon written request of the respective legislative chairman.
(7) Provide that any member insurer aggrieved by any final action or decision of the
association may appeal to the commissioner within thirty days after the action or decision.
(8) Establish the procedures whereby selections for the board of directors will be
submitted to the commissioner.
(9) Contain additional provisions necessary or proper for the execution of the powers
and duties of the association.
(10) Establish procedures for the disposition of liquidating dividends or other monies
received from the estate of the insolvent insurer.
(11) Establish policies and procedures designed to increase participation for
minorities and women in contractual legal services entered into by the association.
(12) Establish policies and procedures relative to the appointment of legal counsel.
(13) Establish policies and procedures relative to a system of alternative dispute
resolution of lawsuits and claims.
(14) Establish procedures whereby a director may be removed for cause.
D. The plan of operation may provide that any or all powers and duties of the
association, except those under R.S. 22:2058(A)(3) and (B)(2) are delegated to a corporation,
association, or other organization which performs or will perform functions similar to those
of this association, or its equivalent, in two or more states. Such a corporation, association,
or organization shall be reimbursed as a servicing facility would be reimbursed and shall be
paid for its performance of any other functions of the association. A delegation under this
Subsection shall take effect only with the approval of both the board of directors and the
commissioner, and may be made only to a corporation, association, or organization which
extends protection not substantially less favorably and effective than that provided by this
Part.
NOTE: Former R.S. 22:2059 redesignated as R.S. 22:419 by Acts 2008, No.
415, §1, eff. Jan. 1, 2009.

Legislative History

Added by Acts 1970, No. 81, §1; Acts 1993, No. 397, §2, eff. June 2, 1993; Redesignated from R.S. 22:1383 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 959, §1, eff. July 6, 2010; Acts 2012, No. 271, §1; Acts 2022, No. 185, §1.