§ 22:2093 — Miscellaneous provisions

Louisiana § 22:2093

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

§2093. Miscellaneous provisions
A. Nothing in this Part shall be construed to reduce or offset the liability for unpaid
assessments of the insureds of an impaired or insolvent insurer operating a plan with
assessment liability.
B. Records shall be maintained of all negotiations and meetings in which the
association or its representatives are involved to discuss the activities of the association in
carrying out its powers and duties. Records of such negotiations or meetings shall be made
public only upon the termination of a liquidation, rehabilitation, or conservation proceeding
involving the impaired or insolvent insurer, upon the termination of the impairment or
insolvency of the insurer, or upon the order of a court of competent jurisdiction. Nothing in
this Subsection shall limit the duty of the association to render a report of its activities
pursuant to R.S. 22:2094.
C.(1) For the purpose of carrying out its obligations under this Part, the association
shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of assets
attributable to covered policies reduced by any amounts to which the association is entitled
as subrogee pursuant to R.S. 22:2087(M). The assets of the impaired or insolvent insurer
attributable to covered policies shall be used to continue all covered policies and pay all
contractual obligations of the impaired or insolvent insurer as required by this Part. The
assets attributable to covered policies, are that proportion of the assets which the reserves that
should have been established for the policies or contracts bear to the reserves that should
have been established for all policies of insurance written by the impaired or insolvent
insurer.
(2) As a creditor of the impaired or insolvent insurer as established in Paragraph (1)
of this Subsection and consistent with R.S. 22:2034, the association and other similar
associations shall be entitled to receive a disbursement of assets out of the marshaled assets,
from time to time as the assets become available to reimburse it, as a credit against
contractual obligations under this Part. If the liquidator has not, within one hundred and
twenty days of a final determination of insolvency of a member insurer by the receivership
court, made an application to the court for the approval of a proposal to disburse assets out
of marshaled assets to guarantee associations having obligations because of the insolvency,
then the association shall be entitled to make application to the receivership court for
approval of its own proposal to disburse these assets.
D.(1) Prior to the termination of any liquidation, rehabilitation, or conservation
proceeding, the court may take into consideration the contributions of the respective parties,
including the association, shareholders, contract owners, certificate holders, enrollees, and
policy owners of the insolvent insurer, and any other party with a bona fide interest, in
making an equitable distribution of the ownership rights of such insolvent insurer. In such
a determination, consideration shall be given to the welfare of the policy owners, contract
owners, certificate holders, and enrollees of the continuing or successor insurer.
(2) No distribution to stockholders, if any, of an impaired or insolvent insurer shall
be made until the total amount of valid claims of the association with interest thereon for
funds expended in carrying out its powers and duties with respect to the member insurer have
been fully recovered by the association.
E.(1) If an order for liquidation or rehabilitation of a member insurer domiciled in
this state has been entered, the receiver appointed under such order shall have a right to
recover on behalf of the member insurer, from any affiliate that controlled it, the amount of
distributions, other than stock dividends paid by the member insurer on its capital stock,
made at any time during the five years preceding the petition for liquidation or rehabilitation
subject to the limitations of Paragraphs (2) and (4) of this Subsection.
(2) No such distribution shall be recoverable if the member insurer shows that when
paid the distribution was lawful and reasonable, and that the member insurer did not know
and could not reasonably have known that the distribution might adversely affect the ability
of the member insurer to fulfill its contractual obligations.
(3) Any person who was an affiliate that controlled the member insurer at the time
the distributions were paid shall be liable up to the amount of distributions received. Any
person who was an affiliate that controlled, as defined in R.S. 22:2092(C)(2), the member
insurer at the time the distributions were declared, shall be liable up to the amount of
distributions he would have received if they had been paid immediately. If two or more
persons are liable with respect to the same distributions, they shall be solidarily liable.
(4) The maximum amount recoverable under this Subsection shall be the amount
needed in excess of all other available assets of the insolvent insurer to pay the contractual
obligations of the insolvent insurer.
(5) If any person liable under Paragraph (3) of this Subsection is insolvent, all its
affiliates that controlled it at the time the distribution was paid, shall be solidarily liable for
any resulting deficiency in the amount recovered from the insolvent affiliate.

Legislative History

Acts 1991, No. 998, §1, eff. Sept. 30, 1991; Redesignated from R.S. 22:1395.13 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 258, §1; Acts 2012, No. 271, §1; Acts 2018, No. 97, §1.