Louisiana Insurance Laws, Rules, and Regulations
Framework
Louisiana is a civil-law state: statutes and the Civil Code control, so do not import common-law assumptions into exam answers. The Commissioner of Insurance heads the Louisiana Department of Insurance and enforces licensing, market conduct and rate/policy-form rules.
Producer duties
Producers must be licensed by line and appointed by the insurer; resident and nonresident (reciprocal) licenses exist, and temporary licenses are limited. Continuing education is 24 hours every two years, including at least 3 hours of ethics. Premiums are trust funds: commingling and rebating are prohibited, and commissions may be paid only to licensed producers. Report address changes, suits and administrative actions promptly.
Unfair trade practices
Study the list, not just the label: misrepresentation and false advertising of policy terms, twisting (misrepresentation to induce replacement), churning, rebating, unfair claim settlement practices, boycott/coercion/intimidation, and failure to maintain complaint records. Violations support fines, license suspension and bad-faith penalties.
Louisiana-specific rules candidates miss
- Valued policy law: in a total loss of a building by a covered peril, the insurer pays the policy limit for the structure, not a depreciated figure.
- Direct action: an injured third party may sue the liability insurer directly without first obtaining judgment against the insured.
- Hurricane/named-storm deductibles must be expressed as a percentage, disclosed, and applied per statute.
- LIGA (Louisiana Insurance Guaranty Association) pays covered claims of insolvent P&C insurers subject to a statutory cap and per-claim deductible, and excludes very large commercial insureds and self-insurers.
- Claims must be acknowledged and paid within statutory deadlines after satisfactory proof of loss; penalties attach to arbitrary conduct.
Rule of thumb: if a question offers a plausible common-law answer and a specific Louisiana statute, choose the statute.