Court Opinion

ID: 3460602
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:27:37.704065+00
Date Added: 2024-06-11T13:44:00.750309
License: Public Domain

Dear Mr. Karns:
You have request an opinion of this office on the proper interpretation of certain sections of the Louisiana Insurance Code regarding fees to be paid by licensed agents.  The question revolved around the interpretation of LSA R.S. 22:1113 and its "additional fee" language and how this statute relates LSA R.S.22:1078 and 1114.
LSA R.S. 22:1113 (A) (1) and (2) requires the licensing of insurance agents, brokers and solicitors.  Subsection 1113 (A)(3) imposes the additional requirement that "no insurance agent shall place a policy of insurance with any insurer that he does not maintain an appointment as an insurance agent . . . " Thus, an insurance agent must be both licensed by the Commissioner and appointed as agent by an insurance company.
A partnership or corporation may be licensed as an agent under the provisions of LSA R.S. 22:1113 (B)(1).  This subsection  requires that:
      "[E]very partner of the partnership and every officer, director, stockholder, and employee of the corporation personally engaged in this state in soliciting or negotiating policies of insurance shall be registered with the Department of Insurance for its license and each such member, officer, director, stockholder, or employee shall also qualify as an individual licensee for any line of insurance the entity is licensed to transact."
The above provision makes it mandatory that if a partnership or corporation is to be a registered agent in this State, any person who solicits or negotiates policies of insurance for this partnership or corporation must also qualify and be licensed as an agent separate and apart from the partnership or corporation's license.
The next provision found in LSA R.S. 22:1113 is the sentence at issue. This sentence states:
"An additional license fee shall be paid for each individual registered under the organization's license."  This provision, when taken with the statute as a whole can only have intended to require that any person who solicits or negotiates insurance policies for the "agent" partnership or corporation must also pay the required bi-yearly agent fee as required by LSA R.S. 22:1078
and is not covered under the partnership or corporations payment of its bi-yearly fees as a registered agent in this State.  In other words, this provision means only that the individuals who work for these  "agent" partnerships and corporations do not receive a free license. The partnership or corporation must pay the fee for its license, and each individual required to be licensed by LSA R.S. 22:1113(B)(1) must pay the fee for his or her license.
The language found in LSA R.S. 22:1078 which requires an "Additional or renewal company appointment (yearly)" fee would seem to apply only to LSA R.S. 1114 (B)(2).  This statute requires an insurance company to appoint as its agent any licensee who is soliciting insurance on behalf of that insurer. This subsection further requires the following:
     "On or before March first each year, each insurer shall submit to the commissioner of insurance, in the manner prescribed by the commissioner, an alphabetical list of licensed agents that it intends to appoint, together with the appointment fee required by LSA R. S. 22:1078."
The license fees imposed by LSA R.S. 22:1078 must be interpreted in light of the provisions of LSA R.S. 22:1113 (B) and (E) and 1114 (B)(2).
With respect to agents, Subsections 1078(B)(3)(a) and (b) provide for three fees:
          First time applicant — resident only         $35.00 Additional or renewal company appointment (yearly) $10.00 Agent renewal fee (every two years)                $20.00
It is the opinion of this office that the proper interpretation of the statutes leads to the inescapable conclusion that the fee imposed for "Additional or company renewal company appointment (yearly) has reference only to the fee imposed by LSA R.S.22:1114(B)(2).  This subsection states that an insurer shall pay yearly the appointment fee required in LSA R.S. 22:1078.  The fee for "Additional or renewal company appointment (yearly)" is the only such fee imposed by Section 1078.  This conclusion is further confirmed by the fact that the insurer's appointment fee is imposed by Section 1114(B)(2) on a yearly basis, whereas LSA R.S. 22:1113 (E)(1)(a) imposes the license fee on agents every two years.
Therefore, it is the opinion of this office that the "additional license fee" language in LSA R.S. 22:1113 (B)(1) simply makes clear that both the entity licensed as an agent and the individual who is a registered agent and who solicits for the entity each pay their respective agent fee.  Also, the "additional or renewal company appointment (yearly)" fee language found in LSA R.S. 22:1078 (B)(3) has reference to the fee imposed on the insurer under LSA R.S. 22:1114(B).  It is not an additional license fee imposed on Louisiana insurance agents.
Very truly yours,
 RICHARD P. IEYOUB ATTORNEY GENERAL By: _______________________________ L. Dean Fryday, Jr. Assistant Attorney General Insurance and Securities Section