Opinion ID: 64505
Heading Depth: 2
Heading Rank: 3

Heading: Louisiana law and analysis

Text: The applicable Louisiana statute expressly provides: A. With the approval of the commissioner of insurance an insurer may convert an entire class of homeowner policies to another homeowner policy form, which has been submitted to and approved by the commissioner, as those homeowners policies are renewed. The terms and conditions of such policies, subject to conversion, shall be continued in full force and effect for the term of the policy. The conversion provided for in this Section shall not constitute the cancellation or nonrenewal of any policy and shall not be grounds for the cancellation or nonrenewal of any policy by the insurer. B. A conversion by an insurer shall be deemed approved by the commissioner unless disapproved within forty-five days of the filing of the proposed conversion with the commissioner. C. All homeowner insurance policies, which have been properly filed and converted pursuant to this Section and the conversion of which will result in a rate change, shall be subject to the laws governing rate changes under Subpart A of Part XXX of this Chapter, R.S. 22:1401, et seq. La.Rev.Stat. Ann. § 22:635.4 (emphasis added). Moore contests the district court's interpretation of the last sentence of subsection A. Specifically, Moore contends that the term shall not constitute was intended by the Louisiana Legislature to mean is not to be or is prohibited from being a cancellation or nonrenewal. Moore maintains that the district court's conclusion is inconsistent with the Louisiana Legislature's intent to prohibit cancellation or nonrenewal of a homeowner policy that has been in effect for more than three years. Moore's basis for this argument is that, with certain very limited exceptions, Louisiana law prohibits the cancellation of homeowner policies that have been in effect for such period. See La.Rev.Stat. Ann. §§ 22:635.3(C), 22:636.2(D). [8] Moore argues that, based on the district court's interpretation, an insurer may, by using the term conversion, avoid a cancellation or nonrenewal and render the prohibitory statutes meaningless. State Farm responds that Section 22:635.4 clearly and unambiguously provides that conversion is neither a cancellation nor a nonrenewal, and that such conversion is allowed when the insurer's form is filed with and approved or deemed approved by the Commissioner. We agree. Having considered the plain meaning of Section 22:635.4, the arguments, and the applicable law, we hold that the district court reached a well-reasoned interpretation of Section 22:635.4. Under the statute, a properly approved or deemed approved conversion of forms is not considered a prohibited cancellation or nonrenewal. The legislative purpose behind the enactment of Section 22:635.4 is to permit an insurer company to convert its insureds' policies without violating Louisiana's cancellation and nonrenewal laws. As the legislature creates the laws, so too can the legislature create an exception. The district court's analysis appropriately accords the full effect to Section 22:635.4 that Louisiana principles of statutory construction require.