§41.3. Requirements for officers and directors of domestic regulated entities; exemptions

            A. For purposes of this Section, the following definitions apply:

            (1) "Director" means a person designated in the articles of incorporation, bylaws, or other organizational documents as a director or person designated, elected, or appointed by any other name or title to act as director.

            (2) "Domestic regulated entity" means any legal entity domiciled in this state that is required to obtain a license or certificate of authority from or register with the commissioner. "Domestic regulated entity" does not mean a motor vehicle rental insurer, insurance agency, broker, managing general agent, producer, reinsurance intermediary broker, claims adjuster, public adjuster, or insurance producer acting as a viatical settlement broker pursuant to R.S. 22:1792(A)(1).

            (3) "Officer" means a president, vice president, treasurer, actuary, secretary, controller, or any other person who performs for the company functions corresponding to those performed by the foregoing officers. "Officer" also means the administrator of a plan of self-insurance providing health and accident or workers' compensation coverage to employees of two or more employers or a risk indemnification trust.

            (4) "Trustee" means the trustee of a trust that provides health and accident or workers' compensation coverage to employees of two or more employers or of a risk indemnification trust.

            B.(1) No person shall serve as an officer, director, or trustee of a domestic regulated entity to whom either of the following applies:

            (a) The person fails to submit to the commissioner the information required by this Section.

            (b) The commissioner refuses to issue or rescinds a letter of no objection pursuant to Subsection D of this Section.

            (2) A domestic regulated entity shall not retain as an officer, director, or trustee any person to whom Paragraph (1) of this Subsection applies.

            C.(1) An officer, director, or trustee of a domestic regulated entity shall, within thirty days of election, appointment, or otherwise being chosen, submit to the commissioner a request for a letter of no objection to serving in that capacity.

            (2) Each request for a letter of no objection shall include all of the following:

            (a) Such biographical and other information as the commissioner may require to ensure that the competence, experience, and integrity of the person are sufficient to protect the interests of the policyholders or members of the domestic regulated entity or the public including but not limited to biographical affidavits, third-party background verifications, and fingerprint submissions pursuant to R.S. 22:1922.

            (b) A statement from the domestic regulated entity indicating the position for which the person has been elected, appointed, or otherwise chosen.

            (c) A sworn statement from the person confirming either of the following:

            (i) The absence of any conflicts of interest upon assuming the position.

            (ii) The disclosure in writing of any conflicts of interest to the domestic regulated entity and the receipt in writing of its waiver by the domestic regulated entity.

            (d) A true copy of the acceptance of trust, oath of office, or other such document signed by the person, which includes a sworn statement that the person agrees to abide by and direct the activities of the domestic regulated entity in compliance with applicable laws and regulations.

            (3) The request shall be in a manner and form approved by the commissioner.

            (4) The provisions of Paragraph (1) and Subparagraphs (2)(a) and (b) of this Subsection and Subsection E of this Section do not apply to volunteer board members of an interlocal risk management agency authorized pursuant to R.S. 33:1351 et seq. The provisions of this Paragraph shall apply to any interlocal risk management agency formed pursuant to R.S. 33:1353 and existing on August 1, 2023, and any interlocal risk management agency formed pursuant to R.S. 33:1353 after that date.

            D. The commissioner may refuse to issue or rescind a letter of no objection if he finds any of the following:

            (1) The competence, experience, or integrity of the person is not sufficiently in the interest of policyholders or members of the domestic regulated entity or of the public to allow the person to serve in the proposed position.

            (2) The person has been the subject of any of the following involving any felony or misdemeanor involving moral turpitude or public corruption or a felony involving dishonesty or breach of trust:

            (a) Conviction.

            (b) Entry of a plea of guilty or nolo contendere.

            (c) Participation in a pretrial diversion program.

            (3) The person knowingly makes a materially false statement or omits material information in the request for a letter of no objection.

            (4) The person fails to provide information that the commissioner requires to evaluate the person's competence, experience, and integrity.

            E. The commissioner may waive the submission of a biographical affidavit, third-party background verification, or fingerprint card when either of the following occurs:

            (1) The person is currently serving as an officer, director, or trustee of a domestic regulated entity and has served in that capacity for a period of five consecutive years.

            (2) The person has received a letter of no objection from the commissioner within one year of being elected, appointed, or otherwise chosen as an officer, director, or trustee and attested that no material change has occurred in the biographical and other information submitted in support of that request.

            F.(1) Except as provided in Paragraph (2) of this Subsection, the commissioner shall refuse to issue or rescind a letter of no objection as provided in Paragraph (C)(1) of this Section if the commissioner finds that the person served as an officer, director, or person with direct or indirect control over the selection or appointment of an officer or director, through contract, trust, or by operation of law, of an insurer doing business in this state, and the person served in that capacity within the two-year period prior to the date the insurer became insolvent, unless the person demonstrates that his personal actions and omissions were not a significant contributing cause to the insolvency, as determined by the commissioner.

            (2) The commissioner may issue a letter of no objection to a former officer, director, or person with direct or indirect control over the selection or appointment of an officer or director of an insurer that became insolvent, provided at least five years have passed from the date the insurer became insolvent.

            G. For the purpose of this Section, "personal action" means any breach of the responsibilities, obligations, or duties imposed upon a person by virtue of his position.

            Acts 2021, No. 14, §1; Acts 2023, No. 2, §1; Acts 2023, No. 47, §1; Acts 2024, No. 170, §1, eff. May 23, 2024.