2023 Louisiana Laws › Revised Statutes › Title 3 - Agriculture and Forestry › §3:3412. Self-insurance fund

RS 3:3412 - Self-insurance fund
A. The commission may operate a program of self-insurance for warehouses, grain dealers, and cotton merchants licensed under this Chapter for the sole purpose of ensuring the availability of funds necessary to meet a licensee's obligations with respect to the reimbursement of any person who stored agricultural commodities in the warehouse or reimbursement of a producer who sold agricultural commodities to a licensee, and who was not fully compensated.
B. The insurance coverage claims against a licensee related to insolvency shall be limited to the amount of security required of the licensee by R.S. 3:3409.
C. The commission shall adopt rules and regulations, in accordance with the Administrative Procedure Act, necessary for the efficient administration of the self-insurance program. Such rules shall include:
(1) Procedures for claims on the self-insurance program.
(2) Reimbursement limitations.
(3) Administration of the self-insurance program.
(4) The establishment of civil penalties for violations of the provisions of the self-insurance program.
D. A person or producer shall be eligible to receive indemnity payments from the self-insurance program if the licensee becomes insolvent and, as a result of the insolvency, is not fully compensated for sums owed to him by the licensee pursuant to any contract between the person or producer and the licensee involving agricultural commodities.
E. Upon a determination of the insolvency of a licensee, the commission shall make the proceeds of the self-insurance program available for use in meeting the licensee's obligations specified in Subsection F of this Section.
F. If claims for indemnity payments from the self-insurance program exceed the amount of available proceeds, the commission shall prorate the claims as provided for in the Administrative Procedure Act and pay the prorated amounts. As future proceeds are collected, the commission shall continue to forward indemnity payments to each eligible person until the person receives the maximum amount payable in accordance with this Section.
G. Notwithstanding any other provision of law to the contrary, if the commission pays a claim using self-insurance program funds, all payments shall be made jointly payable to the claimant and to all secured parties and lienholders that, ten days before the payment date, hold a security interest in or a lien on the crops, farm products, or agricultural commodities, perfected by the filing of a financing statement that:
(1) Identified those crops, farm products, or agricultural commodities as collateral.
(2) Was indexed under that producer's name as debtor.
(3) Was filed in the office designated for filing a financing statement against the producer covering that collateral.
H. Expenses incurred by the commission in administering the self-insurance program shall be reimbursable from the funds collected under the program. Administrative expenses shall be paid in priority to all other payments.
I. A licensee who knowingly or intentionally refuses or fails to pay into the self-insurance program any funds due pursuant to this Chapter shall be subject to civil penalties.
J. Money paid from the self-insurance program in satisfaction of a valid claim shall constitute a debt obligation of the licensee against whom the claim was made. The commission may take action on behalf of the self-insurance program against such person to recover the amount of payment made plus reasonable costs, including court costs, incurred by the commission in obtaining recovery, legal interest from the date of payment of any claim, and reasonable attorney fees. As a condition of payment of a claim from the self-insurance program, the claimant shall subrogate his interest, if any, to the commission in a cause of action against all parties, to the amount of the loss that the claimant was reimbursed by the self-insurance program.
K. The commission may charge fees for participation in the program established in this Section. The amount of the fees shall be fixed by rule adopted in accordance with the Administrative Procedure Act.
L. The fees charged under this Section shall be subject to the following provisions:
(1) All fees shall be deposited immediately upon receipt in the state treasury.
(2) After compliance with the requirements of Article VII, Section 9 of the Constitution of Louisiana relative to the Bond Security and Redemption Fund, and prior to monies being placed in the state general fund, an amount equal to that deposited as required by Paragraph (1) of this Subsection shall be credited to a special fund hereby created in the state treasury to be known as the Agricultural Commodity Commission Self-Insurance Fund. The monies in this fund shall be used solely as provided in Paragraph (3) of this Subsection and only in the amounts appropriated by the legislature. All unexpended and unencumbered monies in this fund at the end of each fiscal year shall remain in this fund. The monies in this fund shall be invested by the state treasurer in the same manner as monies in the state general fund, and interest earned on the investment of these monies shall be credited to this fund, again, following compliance with the requirement of Article VII, Section 9 relative to the Bond Security and Redemption Fund.
(3) The monies in the Agricultural Commodity Commission Self-Insurance Fund shall be used solely for the administration and operation of the program of self insurance provided for in this Section.
Added by Acts 1982, No. 563, §1, eff. Jan. 1, 1983; Acts 1997, No. 1034, §1; Acts 2009, No. 24, §1, eff. June 12, 2009; Acts 2015, No. 430, §1; Acts 2016, No. 12, §1.