Louisiana Laws, Rules and Regulations

 

The regulation of the insurance industry rest primarily with each state.  For example, in Louisiana, the agency that governs this responsibility is called the Department of Insurance also known as the DOI.  The DOI is responsible for licensing of producers and all persons involved in the business of insurance for the state of Louisiana. Your state has a similar department with similar responsibilities.

The Commissioner of Insurance

The officer that presides over this department is the Commissioner.  He / She is in charge of appointing or hiring personnel, including a deputy who acts in the Commissioner’s absence.

Company Classification

Insurance companies issue policies and endorsements that provide insurance coverage.

Insurance companies that are domiciled in this state are known as domestic, if domiciled in other states they are known as Foreign, or actually located or domiciled in other countries are known as Alien companies.

There are three types of Insurance companies:

• Stock
• Mutual
• Fraternal

A stock company is operated for the benefit of the stockholders.  When money is earned, dividends are paid to the stockholders.

A mutual company is operated for the benefit of the policy owners.  It is a not for profit organization in structure and any money is returned to the policyholder in the form of a policy dividend.

A fraternal company is organized for members of a fraternal organization and benefits those members only if something should happen.

Authority Classification granted by the state

Insurance companies are either Admitted or Non Admitted. 

Admitted Insurance Company – Allowed to conduct business in your state.  When a company becomes Admitted the Department of Insurance issues a Certificate of Authority.

Certificate of Authority – In order to be issued a Certificate of Authority a company must meet certain financial and other requirements that are set by your state’s Insurance Code.  A company must file with the Department of Insurance a copy of its Charter of Incorporation; with the Department of Insurance in any state they want to operate in. They must also give reports of its financial standing, surplus and deposits.  The president and secretary of the company must sign these statements under oath.  Information on all Officers, Directors and/or Owners with a controlling interest must be filed.  The company must appoint at least one state agent.

After application is filed, the Department of Insurance will conduct an examination of the company and if everything is in order the Certificate of Authority will be issued.  The company must hire an Independent Auditor, and Actuary to prepare annual financial statements for the next three years.

Non-Admitted Insurance Company – A company that is not licensed to conduct business in this state.  This does not mean the company is being run incorrectly or in financial difficulty.  After completing the steps required by the appropriate Department of Insurance to acquire a Certificate of Authority, these companies simply pay taxes to the State to conduct business in the state.

[mtouchquiz id=1]