The Louisiana Department of Insurance issued a press release announcing the amendment of Rule 13–Special Assessment; Creation of Dedicated Fund Account, which was originally promulgated in 2000. Rule 13 provides the means for the assessment fee charged to insurers to fund insurance fraud investigation and enforcement in the state.
The rule states that $30,000 is first withheld annually to cover the expense of the collection of the fees and the operation of the Department of Insurance. $187,000 is to be withheld annually to fund insurance fraud detection, investigation, and public awareness. The remaining fees are distributed as follows: 75% to the Insurance Fraud Investigation Unit within the Office of State Police, 15% to the Department of Justice's Insurance Fraud Support Unit, and 10% to the Department of Insurance's Section of Insurance Fraud.
The assessment does not apply to premiums received on life insurance policies, annuities, credit insurance, crop and livestock insurance, federal flood insurance polices, reinsurance contracts, reinsurance agreements, or reinsurance claims transactions. Only 50% of the premiums received on health and accident insurance policies are subject to the assessment.
Previously, any excess funds at the end of the fiscal year were to be refunded to each insurer on a pro rata basis. However, Rule 13 has been amended so that the excess funds shall remain in the account at the end of the fiscal year.
Rule 13 is adopted on the date of promulgation in the Louisiana Register, found here.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.