2023 Louisiana Laws › Revised Statutes › Title 22 - Insurance › §22:1562. Prohibited acts

RS 22:1562 - Prohibited acts
A.(1) No insurer or insurance producer shall pay any money or commission or brokerage, or give or allow any valuable consideration or compensation to any person or business entity not duly licensed as an insurance producer, nor to an insurer not licensed to do business in this state, for or because of service rendered or performed in this state in selling, soliciting, negotiating, or effecting a contract of insurance on any property or risks, or insurable interests, or business activities located within or transacted within this state. The prohibition of this Subsection shall not apply with respect to any contract of reinsurance.
(2) The prohibition of this Subsection shall not apply to the distribution of profits to the owners of an insurance agency business entity licensed as a producer if the business entity has complied with the provisions of R.S. 22:1546(B) and the owners are not persons to whom either of the following applies:
(a) Been convicted or pleaded nolo contendere to any felony, participated in a pretrial diversion program pursuant to a felony charge, suspension and deferral of sentence, and probation pursuant to Code of Criminal Procedure Article 893, or been convicted of any misdemeanor involving moral turpitude or public corruption.
(b) Had an insurance producer license revoked or suspended.
(3) The prohibitions of this Subsection shall not apply to the distribution of profits to the owner of an insurance agency business entity licensed as a producer if the owner has either one of the following:
(a) The written consent or a waiver from the commissioner pursuant to 18 U.S.C. 1033 to engage in the business of insurance.
(b) An individual insurance producer license issued subsequent to any plea or conviction described in Subparagraph (2)(a) of this Subsection.
(4) The provisions of Paragraph (2) of this Subsection shall not apply to the Louisiana Workers' Compensation Corporation.
B.(1) Whoever violates this Section shall, upon conviction, be fined not less than two thousand dollars, nor more than fifty thousand dollars, or imprisoned with or without hard labor, for not more than three years, or both.
(2) Any conviction for violation of this Section shall constitute grounds for the immediate suspension or revocation by the commissioner of insurance of the license of such insurance producer to sell insurance, in addition to those grounds set forth in R.S. 22:1554.
C.(1) It shall be unlawful for any person or business entity, without conforming to the provisions of this Part, directly or indirectly, to represent himself or itself to be an insurance producer or limited lines producer, or to solicit, negotiate, or effect any contract of insurance or renewal thereof, or to attempt to effect the same on any property, or risk or insurable interests or business activities, located within or transacted within this state. This Subsection shall not apply to:
(a) The clerical duties of office employees not involved in soliciting insurance.
(b) Employees of insurers who solicit insurance only for or in conjunction with licensed insurance producers compensated on a commission basis.
(c) The collection of premiums by secretarial or clerical employees of a licensed insurance producer, or other person so authorized by a licensed insurance producer.
(d) Employees of insurers who do not solicit insurance but are authorized by their employer to sign policies of insurance.
(2) Wherever the commissioner of insurance determines that a violation of Paragraph (1) of this Subsection has occurred, whether that violation be intentional or not, the commissioner or his designee is hereby authorized to issue an order to cease and desist from the violations complained of, and the commissioner is hereby authorized to seek injunctive relief from the district court of the district in which the violation may have occurred or in any proper venue authorized under the Code of Civil Procedure.
D.(1) No person licensed as, or representing himself to be, an insurance producer shall receive anything of value as premium payment or commission for an insurance policy rider, binder, or plan without making a bona fide application to an insurer for an insurance policy.
(2) No person licensed as, or representing himself to be, an insurance producer shall fail to account for or remit any premiums, monies, or properties belonging to another which come into the possession of the applicant in the course of doing insurance business, or improperly withholding, misappropriating, converting, or failing to timely remit any premiums, monies, or properties received in the course of doing insurance business, whether such premiums, monies, or properties belong to policyholders, insurers, beneficiaries, claimants, or others.
E.(1) It shall be unlawful for any insurance producer, directly or indirectly, to collect any insurance premium payment, or compensation, or to solicit, negotiate, effect, procure, receive, or forward any contract of insurance or renewal thereof, in relation to any property or risk or insurable interest in this state, for any insurer not lawfully authorized to transact business in this state, or in any manner to aid or assist in any such transaction, except through licensed surplus lines brokers.
(2) Except as provided in Paragraph (3) of this Subsection, any person shall be liable for the full amount of any loss sustained on any contract of insurance made by or through him or it, directly or indirectly, with any insurer not lawfully authorized to transact business in this state, and for any taxes which may become due under any law of this state by reason of such contract. For purposes of this Section, any surplus lines insurer which is approved by the commissioner shall be considered lawfully authorized to transact business in this state.
(3) Any licensed producer who writes a policy through a licensed surplus lines broker shall not be liable for any losses or taxes as provided for in this Section.
(4) Any person or business entity found to have violated this Subpart shall be deemed to have engaged in unfair trade practices and shall be subjected to the penalties provided herein. Additionally, any person found to have knowingly and intentionally violated any provisions of this Subsection shall be guilty of a felony and shall be subjected to a term of imprisonment, with or without hard labor, not to exceed five years, on each count, and each day on which a violation of this Subsection occurs shall be considered a separate violation.
F. It shall be unlawful for any producer to sign any policy of insurance endorsement in blank.
G. Repealed by Acts 2001, No. 1158, §3.
H. No insurer or producer shall accept or process an application for coverage under a Medicare+Choice plan unless the following requirements are met:
(1) The Medicare enrollee or his authorized representative has signed the application for coverage.
(2) The Medicare enrollee is provided a written notice upon transfer from one approved Medicare+Choice plan to another stating that his coverage is being transferred. Such notice shall also state how the change in coverage will impact the Medicare enrollee's access to health care providers, including specifying any known change in health care providers available to provide care.
(3) The Medicare enrollee is provided a written notice upon plan cancellation of his current Medicare+Choice coverage that clearly states the date his coverage ends.
(4) The Medicare enrollee is notified of any known change in health care providers that may reasonably result from the action of the producer.
Acts 2001, No. 158, §1, eff. Jan. 1, 2002; Acts 2001, No. 275, §1, eff. June 1, 2001; Acts 2001, No. 1158, §§1 and 3; Redesignated from R.S. 22:1148 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2011, No. 94, §1, eff. Jan. 1, 2012; Acts 2016, No. 315, §1, eff. June 2, 2016; Acts 2018, No. 127, §1.