§1892.2. Catastrophic loss claims settlement practices; penalties and attorney fees

            A.(1) An insurer shall not violate any provision of this Section or R.S. 22:1892(A)(4) or (I).

            (2) For catastrophic losses arising under an insurance policy for residential property, an insurer shall transmit payment of the amount of any claim due to any insured within sixty days after receipt of satisfactory written proof of loss.

            (3) For catastrophic losses arising under an insurance policy for immovable property, other than residential property, an insurer shall transmit payment of the amount of any claim due to any insured within ninety days after receipt of satisfactory written proof of loss. The timeline provided for in this Paragraph may be extended up to thirty additional days by the commissioner for commercial policies insuring multiple locations.

            B.(1) Failure to comply with Subsection A of this Section, when the failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty payable to the insured, in addition to the amount of the loss, of only the greater of fifty percent of the amount found to be due from the insurer to the insured, or in the event that a partial payment or tender has been made, fifty percent of the difference between the amount timely paid or tendered and the amount found to be due, plus proven economic damages sustained as a result of the breach, or two thousand five hundred dollars, whichever is greater, together with, in either instance, reasonable attorney fees and costs actually incurred. The penalties, if awarded, shall not be used by the insurer in computing either past or prospective loss experience for the purpose of setting rates or making rate filings.

            (2) Claims for penalties and attorney fees pursuant to this Section are subject to a liberative prescription of two years.

            C.(1) As a condition precedent to bringing an action pursuant to this Section, the insurer shall be given sixty days' written notice of the violation by the insured or his representative, hereinafter referred to in this Section as the "cure period notice".

            (2) The cure period notice may be provided through either a form transmitted by the department or by formal written demand providing sufficient notice of the facts and circumstances of the dispute.

            (3) If the insurer pays within sixty days after the insurer receives a cure period notice the full amount alleged to be due in the notice, together with any actual expenses incurred by the insured and claimed in the notice, including any attorney fees, not to exceed twenty percent of the amount alleged to be due under the policy, there shall be no further cause of action pursuant to this Section regarding that noticed demand.

            (4) If the insurer does not pay the full amount demanded by the cure period notice as provided for in Paragraph (3) of this Subsection but does make a partial payment within sixty days of the insurer's receipt of the cure period notice, the penalty otherwise due, if any, on the amount actually paid by the insurer within sixty days of the insurer's receipt of the cure period shall be reduced by half.

            (5) The insurer that is the recipient of a cure period notice shall respond to the insured or his representative within sixty days.

            (6) If a cure period notice is transmitted within the last ninety days prior to the running of prescription, the applicable prescriptive period for an action filed pursuant to the provisions of this Section, or for an action concerning the underlying policy dispute, shall be suspended for a period until thirty days after the insurer transmits its written response to the cure period notice.

            (7) If any suit is filed prior to transmitting the cure period notice required by this Subsection, it shall be automatically stayed until sixty days after the cure period notice is received. The delay for answering any suit shall automatically be extended until thirty days after the end of the cure period. If the insurer timely pays the full amount demanded as provided for in Paragraph (3) of this Subsection, any cause of action prematurely filed shall be subject to dismissal at the insured's cost.

            D.(1) An insurer may make additional requests for information or inspection if during its investigation of the claim the additional requests are considered necessary. A request for information that is in the possession of the insurer or its representatives shall not extend any of the insurer's deadlines.

            (2) Nothing in this Subsection shall be construed to relieve an insurer of its obligation to transmit payment of the amount of any claim due to any insured within the deadline following receipt of satisfactory proof of loss concerning the amount as set forth in Paragraphs (A)(2) and (3) of this Section, nor to extend any deadline for payment when the requested information or inspection is found by the trier of fact to be unnecessary considering all other proof of the loss then available to the insurer.

            (3) Nothing in this Subsection shall be construed to prohibit an insured from making a supplemental claim, nor to relieve an insurer from the obligation to conduct a supplemental investigation, or to make a supplemental payment, if warranted by the facts of a supplemental claim. A supplemental claim adds newly found damage or additional costs to the original claim. The fact that an insurer makes a supplemental payment shall not itself be construed as evidence of a violation of this Section or R.S. 22:1892.

            (4) An insurer's tender of undisputed additional amounts due to the insured within thirty days of the insurer's receipt of a valid appraisal award does not itself constitute evidence of bad faith on the part of the insurer.

            E. The provisions of this Section do not apply to claims made under any type of policy or contract of insurance specified in R.S. 22:1811 or 1821 or Chapter 10 of this Title.

            F. The Louisiana Insurance Guaranty Association, as provided in R.S. 22:2051 et seq., and the Louisiana Citizens Property Insurance Corporation, as provided in R.S. 22:2291 et seq., shall not be subject to the provisions of Code of Civil Procedure Article 591 et seq., or any other provision allowing a class action, for any damages, that includes any penalties awarded pursuant to the provisions of this Section. The Louisiana Insurance Guaranty Association, as provided in R.S. 22:2051 et seq., shall also not be liable for any special damages or penalties provided for in this Section. The Louisiana Citizens Property Insurance Corporation, as provided in R.S. 22:2291 et seq., shall not be liable for general damages, special damages, or penalties in excess of the policy's limit; however, this Subsection does not limit the Louisiana Citizens Property Insurance Corporation from paying legal interest due from breach or reasonable attorney fees and costs when otherwise provided by this Section.

            Acts 2024, No. 3, §1, eff. July 1, 2024; Acts 2024, No. 757, §1, eff. July 1, 2024.