Free Louisiana Casualty practice questions

Answer: A. The appointing insurer, within 15 days

Under R.S. 22:1558(B)(2), when the commissioner determines that a producer is ineligible for appointment, the commissioner must notify the insurer within fifteen days of that determination. The insurer is the party that filed the notice of appointment, and the statute directs this notice to it rather than to the producer alone or to the NAIC. Thirty days is the outer limit on the commissioner's eligibility verification itself, not the time to give notice of ineligibility.

Answer: B. Thirty days after receiving the copy of the notification

La. R.S. 22:1559(D)(2) gives the producer thirty days, counted from receipt of the original or any additional notification, to file written comments about its substance with the commissioner. The producer must send a copy of those comments to the reporting insurer at the same time, and the comments become part of the commissioner's file. Fifteen days is the period the insurer has to mail the producer its copy of the notification, not the producer's window to respond. Ten days is shorter than the statute allows, and the window runs from receipt of the notification rather than from the termination date, so sixty days after termination is also wrong.

Answer: A. During the 36-month period following the termination's effective date

When an agency contract is terminated and the insurer must by law continue the insured's coverage, the expirations statute requires the insurer to keep paying the producer commissions on policies it is required to renew during the 36-month period after the termination's effective date, or three years, whichever is sooner. The commissions are paid at the insurer's prevailing rates for producers whose contracts were not terminated. A 12-month period and a cutoff at the first renewal both fall short of the statutory period, and the obligation does not run indefinitely for as long as the insured renews.

Answer: A. 30 days

R.S. 22:1558(B)(2) requires the commissioner, on receiving a notice of appointment, to verify the producer's eligibility within a reasonable time that may not exceed thirty days. Fifteen days is a different deadline in Section 1558(B): the insurer's window for filing the notice after the agency contract is executed, and also the time for notifying the insurer once a producer is found ineligible. Ten and sixty days are not periods Section 1558(B) uses.

Answer: C. Within thirty days after it receives the demand from the commissioner

R.S. 22:2191(B)(3) directs the division of administrative law to hold a demanded hearing within thirty days after it receives the demand from the commissioner, subject to postponement by mutual consent, on a motion for good cause, or by the division's own order. Five days is the time the commissioner has to send the division a copy of the demand under Paragraph (B)(2). Sixty days is a separate outer limit measured from the date of the original demand, not from the division's receipt, and ninety days does not appear in this provision.

Answer: C. A penalty of at least $100 and up to $2,000, at the court's discretion

Louisiana's subpoena statute provides that a person who fails without reasonable excuse to obey a commissioner's subpoena must pay a penalty of not less than $100 nor more than $2,000, with the amount left to the court's discretion. The penalty is recovered in the name of the state by the district attorney of the parish where the violation occurs. A $500 to $5,000 range and a $1,000-per-act figure set by the commissioner do not appear in this provision, and a single fixed $2,000 amount ignores both the $100 floor and the court's discretion.

Answer: C. At least 20 days before the cancellation takes effect

Louisiana lets an insurer cancel a policy when the insured fails to keep up membership in an organization and that membership is a condition precedent to coverage. Written notice must be actually delivered or mailed to the insured, or to the insured's representative in charge of the insured subject, not less than 20 days before cancellation takes effect, and like notice goes to each mortgagee, pledgee, or other known person with an interest in a loss. Ten, thirty and sixty days are not the period this section sets for a membership-based cancellation.

Answer: B. Up to fifty percent of the reasonable expenses or $2,500, whichever is greater

On a first-party claim, when an insurer fails to give an entitled insured rental vehicle coverage within three business days of a written request, and the failure is found to be arbitrary, capricious, or without probable cause, Louisiana allows a penalty on top of the reasonable expenses of up to fifty percent of those expenses or $2,500, whichever is greater. The ten percent figure belongs to the separate rule for a third-party claimant deprived of a personal vehicle, not to a first-party insured. The floor this rule sets is $2,500, not $5,000 or $1,000, and it uses the greater of the two amounts, not the lesser.

Answer: B. The commissioner may reactivate the license, as it complied before expiration

La. R.S. 22:1547(L)(3) allows the commissioner to reactivate an inactivated business entity license once the entity complies with the designation requirement, provided compliance comes before the license expires. Because the entity designated a licensed producer before expiration, the commissioner may reactivate the existing license; no new application is needed, no one-year wait is a condition of this reactivation, and compliance after expiration would come too late rather than being required.

Answer: A. Once thirty days have passed after that office receives the request

For a refund owed because the insured asked to cancel, Louisiana law starts interest running after thirty days from delivery of the written request to the insurer's state, regional or home office from which the refund would issue. Where the insurer gave the cancellation notice instead, the same thirty days run from delivery of that notice to the insured. Ten and sixty days are not the periods this rule uses. Measuring from the original expiration date is wrong because the clock starts with delivery of the request, not with the end of the policy term. The insurer stops further interest from accruing by furnishing timely evidence that it mailed the refund to the insured's last known address.