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      RS 22:365     


§365.  Deposit or surety; required

A.  To assure faithful performance of its obligations to policyholders, every vehicle mechanical breakdown insurer shall, prior to the issuance of a license, deposit with or for the benefit of the insurance commissioner securities which at all times shall have a value of not less than one hundred fifty thousand dollars.

B.  Those securities which may be used as a deposit shall be cash, certificates of deposit purchased from a financial institution licensed to conduct business in the state of Louisiana, bonds of the state of Louisiana or any of its political subdivisions, or bonds of the United States government.

C.  In lieu of the deposit of securities required by this Section, the applicant may file with the commissioner a surety bond in the amount required by Subsection A of this Section.  The bond shall be issued by a surety insurer authorized to do business in the state of Louisiana, and shall be for the same purpose as the deposit in lieu of which it is filed and shall be subject to the approval of the commissioner.  No such bond shall be cancelled or subject to cancellation unless thirty days written notice is given to the commissioner.

D.  If deposit is made in the form of bonds or certificates of deposit, they shall be irrevocably pledged to the commissioner; however, any interest earned on such securities shall be the property of the vehicle mechanical breakdown insurer.

E.  Each deposit or surety shall be maintained unimpaired, unencumbered, and pledged to the commissioner until such time as all outstanding policies or agreements of Louisiana have run their full term and expired.  It is the intent of this Subsection that the deposit or surety remain fully in force until such time as all of the vehicle mechanical breakdown insurer's obligations to the policyholders are fulfilled.

F.  The deposit or surety required by this Section may from time to time be substituted with other acceptable securities, or surety bond, subject to the approval of the commissioner.

Added by Acts 1978, No. 520, §1, eff. July 12, 1978; Redesignated from R.S. 22:1804 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §1.

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