§ 22:2314 — Policy take-out program

§2314. Policy take-out program
A. The legislature created the Louisiana Citizens Property Insurance Corporation to
operate insurance plans as a residual market for residential and commercial property. The
legislature further intends that the corporation work toward the ultimate depopulation of
these residual market plans. To encourage the ultimate depopulation of these residual market
plans, there is hereby created the Louisiana Citizens Property Insurance Corporation Policy
Take-Out Program.
B.(1) Not less than once per calendar year, the corporation, with the approval of the
governing board of the corporation, may offer some or all of its in-force policies for removal
to the voluntary market. The corporation shall include in any offers for depopulation policies
that, based on geographic and risk characteristics, serve to reduce the exposure of the
corporation.
(2) Each insurer participating in the take-out program shall be offered all of the
corporation's in-force policies. In response, the insurers shall provide the corporation with
a list of policies they propose to take out subject to authorization by the policy's agent of
record. No policy shall be assumed by a take-out company without the authorization of the
agent of record.
C. Each insurer admitted to write homeowners insurance or insurance insuring one-
or two-family owner occupied premises for fire and allied lines or insurance which covers
commercial structures in the state of Louisiana may apply to the Louisiana Citizens Property
Insurance Corporation to become a take-out company. Insurers will be approved to
participate in the depopulation of the Louisiana Citizens Property Insurance Corporation
based on the following criteria:
(1) The capacity of the insurer to absorb the policies proposed to be taken out of the
corporation and the concentration of risks of those policies. Such capacity may be evidenced
by providing to the Louisiana Citizens Property Insurance Corporation a copy of a valid
certificate of authority issued by the Department of Insurance to the insurer. An insurer shall
not be qualified to participate in the take-out program unless that insurer has at least a B+
rating with A.M. Best, or its equivalent.
(2) An insurer shall have the rates proposed to be charged for the policies being taken
out, filed, and approved by the Department of Insurance with an effective date prior to the
assumption of policies. The insurer shall provide proof to Louisiana Citizens Property
Insurance Corporation that the rates have been approved and are adequate under R.S.
22:1451 et seq.
(3) The rates which are charged by the company submitting a take-out plan must
comply with R.S. 22:2303 in the first year that the company charges premiums to the
customer. During the second and third years of coverage, the take-out company shall apply
to the Department of Insurance for rates which are actuarially justified, but in no case may
the rates be greater than those authorized in R.S. 22:2303.
D. The corporation shall submit an insurer's application to participate to the
governing board for approval.
E. The board of directors of the Louisiana Citizens Property Insurance Corporation
shall develop guidelines for the take-out program which shall be filed with and approved by
the Senate Committee on Insurance, the House Committee on Insurance, and the
commissioner of insurance.
F. The provisions of this Section shall not be construed to impair the right of any
Louisiana Citizens Property Insurance Corporation policyholder, upon receipt of an approved
take-out offer, to retain his current producer, so long as that producer is a licensed insurance
producer authorized to bind insurance coverage for the FAIR and Coastal Plans, or to retain
Louisiana Citizens Property Insurance Corporation as their insurer. This right shall not be
canceled, suspended, impeded, abridged, or otherwise compromised by any rule, plan of
operation, or depopulation plan.

Legislative History

Acts 2007, No. 377, §1, eff. Nov. 1, 2007; Redesignated from R.S. 22:1430.23 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2008, No. 465, §1; Acts 2010, No. 397, §1, eff. June 21, 2010; Acts 2012, No. 271, §1; Acts 2014, No. 114, §1; Acts 2018, No. 131, §1.