The original instrument was prepared by Thomas L. Tyler. The following digest,
which constitutes no part of the legislative instrument, was prepared by LG Sullivan.
DIGEST
SB Reengrossed 2020 Regular Session Smith
Present law, relative to rate making procedures and organizations, assigns risks under the La.
Automobile Insurance Plan, and in an effort to provide applicants for casualty insurance coverage
who are in good faith but unable to procure coverage through ordinary methods, authorizes casualty
insurers to agree among themselves on the use of reasonable rate modifications for coverage but
subject to approval of the commissioner of insurance. Provides that no domestic insurance company
shall be denied servicing carrier status.
Proposed law requires the commissioner of insurance, after consulting with insurers authorized to
issue motor vehicle insurance, to approve a reasonable plan, known as the Louisiana Automobile
Insurance Plan (Plan), which is to function exclusively as a residual market mechanism, for those
good-faith applicants unable to procure coverage through ordinary means in order to insure private
passenger motor vehicles, commercial motor vehicles including garage liability insurance, and other
motor vehicles.
Present law provides that the governing committee of the assigned risks or the La. Automobile
Insurance Plan consists of the following nine members:
(1) The commissioner of insurance, or his designee.
(2) One member designated by the commissioner of insurance.
(3) One member representing the La. Association of Fire & Casualty Insurance Companies.
(4) One member appointed by the president of the Senate.
(5) One member appointed by the speaker of the House.
(6) Four members selected from and by the membership subject to approval by the
commissioner of insurance.
Proposed law retains these provisions in present law.
Proposed law creates a Personal Automobile Insurance Procedure (PAIP) to do the following:
(1) Cause to be issued policies of private passenger automobile insurance in the Plan's name to
eligible applicants, and to provide policyholder and claim handling services.
(2) Allocate the operating results of the PAIP, profit or loss, to those subscribers that write
 private passenger motor vehicle insurance.
Proposed law also creates a Commercial Automobile Insurance Procedure (CAIP) to do the
following:
(1) Appoint a company or companies to act as a servicing carrier to issue commercial automobile
insurance policies to eligible applicants and to provide policyholder and claim handling
services.
(2) Cause to be issued policies of commercial automobile insurance in the Plan's name to eligible
applicants and to provide policyholder and claim handling services.
(3) Allocate the operating results of the CAIP, profit or loss, to those subscribers that write
commercial motor vehicle insurance.
Proposed law requires that any policy issued pursuant to the PAIP or the CAIP be recognized as if
issued by an insurance company authorized to issue policies in this state. Requires that every form
of a policy, endorsement, rider, manual of classification, rules, and rates, every rating plan and every
modification of any of them proposed to be used by the Plan be filed and approved by the
commissioner of insurance.
Proposed law requires that all companies writing insurance for private passenger motor vehicles,
commercial motor vehicles, and other motor vehicles in this state be subscribers to the Plan and
share in the administrative expenses for the operation of the Plan based on a subscriber fee and an
assessment based on the market share of premiums.
Allows any applicant for any policy, any person insured under a policy, and any insurance company
affected to appeal to the commissioner from any ruling or decision of the manager or the governing
committee of the Plan to operate the Plan. Authorizes any person aggrieved by an order or act of the
commissioner to file a petition, within ten days after receipt of written notice of the order or act, in
the 19th JDC or in the district court of the domicile of the aggrieved person, for a review of the order
or action. Requires the court to summarily hear the petition and make the appropriate order or decree.
Present law, the Motor Vehicle Safety and Responsibility Law, does not apply to any motor vehicle
owned by the United States, this state or any political subdivision or municipality in this state, a bona
fide organized public volunteer fire department which owns and operates those specially equipped
motor vehicles for firefighting purposes, nor, except for other specific present law, with respect to
any motor vehicle which is subject to the jurisdiction of the Louisiana Public Service Commission,
or to any motor vehicle subject to registration under the single state registration for motor carriers
authorized by present federal law, or as otherwise permitted by present federal law, or to carriers of
persons operating over specified routes with fixed termini and predominantly under franchises or
indeterminate permits granted by an incorporated municipality and who are subject to the regulatory
jurisdiction of such municipality.
Proposed law makes present law exceptions applicable to proposed law.
Effective January 1, 2021.
(Amends R.S. 22:1475; repeals R.S. 32:1043)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original bill
1. Repeals provisions in present law to provide consistency.
2. Changes effective date.
3. Provides exceptions.


Statutes affected:
SB71 Original:
SB71 Engrossed: 32:1041(A)
SB71 Reengrossed: 32:1041(A)
SB71 Enrolled: 32:1041(A)