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      RS 51:3163     

  

§3163. Requirements for doing business

            A. Motor vehicle service contracts shall not be issued, sold, or offered for sale in this state unless the provider has done each of the following:

            (1) Registered with the secretary of state and remains in good standing.

            (2) Provided a receipt for, or other written evidence of, the purchase of the motor vehicle service contract to the contract holder.

            (3) Provided a copy of the motor vehicle service contract to the service contract holder within a reasonable period of time from the date of purchase.

            B. Beginning February 1, 2019, each provider of a motor vehicle service contract sold in this state shall file an application for an initial registration with the secretary of state consisting of the provider's name, address, telephone number, and contact person, designating a person in this state for service of process, and providing a listing of all officers, all directors, and all owners of ten percent or more of the business. Additionally, the provider shall file a copy of its basic organizational documents, including articles of incorporation, articles of organization, articles of association, or a partnership agreement. Each application for registration shall be accompanied by a fee of six hundred dollars. All fees shall be paid to the secretary of state.

            C. A registration shall be effective for two years, unless the registration is denied or revoked. Ninety days prior to the expiration of a registration, a provider shall submit a renewal application on a form prescribed by the secretary of state and a renewal fee of two hundred fifty dollars. All fees shall be paid to the secretary of state.

            D. Each registrant shall notify the secretary of state of any material change in the registration information within sixty days of the effective date of such change. The notice shall be accompanied by supporting documentation.

            E. In order to assure the faithful performance of a provider's obligations to its contract holders and to insure its outstanding obligations, each provider shall comply with the following:

            (1) Each motor vehicle service contract shall be insured under a reimbursement insurance policy issued by an insurer licensed, registered, or otherwise authorized to transact the business of insurance in this state, and which complies with the provisions of Subsection F of this Section.

            (2) A provider that issues motor vehicle service contracts shall obtain and file with the secretary of state a copy of the reimbursement insurance policy issued to the provider.

            (3) The issuer of the reimbursement insurance policy required by this Subsection shall do either of the following:

            (a) Maintain surplus as to policyholders and paid-in capital of at least fifteen million dollars.

            (b) Maintain surplus as to policyholders and paid-in capital of less than fifteen million dollars but at least equal to ten million dollars and maintain a ratio of net written premiums, wherever written, to surplus as to policyholders and paid-in capital of not greater than three to one.

            F. An insurer issuing a reimbursement insurance policy to a provider for any motor vehicle service contract issued, offered for sale, or sold in this state shall comply with all of the following:

            (1) Be deemed to have received the premium for the insurance upon the payment of the provider fee by a consumer for a service contract issued by an insured provider.

            (2) Provide reimbursement to, or payment on behalf of, the provider under the terms of the insured service contracts issued or sold by the provider or, in the event of the provider's nonperformance, provide or pay for, on behalf of the provider, all covered contractual obligations incurred by the provider under the terms of the insured service contracts issued or sold by the provider.

            (3) Accept a claim arising under the contract directly from a contract holder, if the provider does not comply with any contractual obligation pursuant to the contract within sixty days of presentation of a valid claim by the contract holder.

            (4)(a) Terminate or not renew the policy covering service contracts issued in this state only after a notice of termination or nonrenewal is presented to the secretary of state and commissioner of insurance, at least ten days prior to the termination or nonrenewal of the policy.

            (b) The termination or nonrenewal shall not reduce the insurer's responsibility for any insured contract issued or sold prior to the date of termination or nonrenewal.

            G. Except for the registration requirements of this Section, providers, administrators, and persons marketing, selling, or offering to sell motor vehicle service contracts are exempt from any licensing requirements of this state and shall not be subject to other registration information or security requirements.

            H. The marketing, sale, offering for sale, issuance, making, proposing to make, and administration of motor vehicle service contracts by providers and related service contract sellers, administrators, and other persons is not insurance and shall be exempt from all provisions of the Louisiana Insurance Code.

            I. Motor vehicle manufacturers are exempt from the registration and financial responsibility requirements of this Section.

            J. Nothing in this Section shall be construed to limit the right of the insurer to seek indemnification or subrogation against the provider if the insurer provides or pays, or is obligated to provide or pay, for any covered contractual obligation incurred by the provider.

            Acts 2018, No. 592, §2, eff. Feb. 1, 2019.



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