RÉSUMÉ DIGEST
ACT 488 (HB 672) 2024 Regular Session Jordan
Existing law provides that acts of a managing general agent (MGA) are considered to be the
acts of the insurer on whose behalf the MGA performs. Further provides for financial
examination of an MGA as if it were the insurer.
New law prohibits a person from acting as an MGA if the person served in a capacity with
direct or indirect control over the selection or appointment of an officer or director through
contract, trust, or operation of law of an insurer, and the person served in that capacity within
the 2-year period before the date the insurer became insolvent.
New law authorizes the person to act as an MGA if the person demonstrates that his personal
actions were not a significant contributing cause to the insurer's insolvency. Further
authorizes the commissioner of insurance (commissioner) to approve the person, if at least
5 years have passed since the date the insurer became insolvent.
New law requires an insurer to have an audited financial report that includes the opinion of
an independent certified public accountant regarding the financial position of the MGA as
of the most recent year-end. Requires inclusion of certain financial information. Further
requires the insurer to submit the report to the commissioner upon his request.
New law requires an MGA to quarterly submit an account report to each insurer with whom
the MGA has a contract. Requires the MGA to include in the report certain statements
regarding written, earned, and unearned premiums; losses and expenses paid and
outstanding; losses incurred but not reported; management fees; and outlines of expenses.
New law requires an MGA to submit to an examination of the MGA's financial condition as
the commissioner deems necessary. Requires the MGA to pay examination expenses in an
amount certified by the commissioner.
New law requires an MGA to provide certain financial notifications to the La. Dept. of
Insurance (LDI) not later than the 30th day after the date the events occur. Requires
notification when any of the following occurs:
(1) Balances due to an insurer for more than 90 days exceed either $1,000,000 or 10%
of the insurer's policyholder surplus as reported in the MGA's annual statement.
(2) Balances due for more than 60 days from a property and casualty agent or MGA
appointed by or reporting to the MGA exceed $500,000.
(3) Authority to settle claims for an insurer is withdrawn.
(4) Money held for an insurer for losses is greater than an amount that is $100,000 more
than the amount necessary to pay the losses and loss adjustment expenses expected
to be paid on the insurer's behalf within the next 60-day period.
(5) The contract required pursuant to existing law (R.S. 22:1624) is cancelled or
terminated.
New law authorizes an MGA to satisfy notification requirements of financial circumstances
with a single annual report if the MGA routinely operates above certain limits in new law and
LDI verifies that fact in conformity with rules adopted by the commissioner.
New law authorizes the commissioner to promulgate and adopt rules in accordance with the
APA for purposes of new law.
Effective August 1, 2024.
(Amends R.S. 22:1623, 1625(A), and 1626; Adds R.S. 22:1628 and 1629)


Statutes affected:
HB672 Original:
HB672 Engrossed:
HB672 Reengrossed: 22:1625(A)
HB672 Enrolled: 22:1625(A)
HB672 Act : 22:1625(A)