§1428. Special assessment; creation of dedicated fund account
A.(1) Except as provided in Paragraph (2) of this Subsection, the commissioner of insurance may assess a fee on the direct premiums received by each insurer licensed by the Department of Insurance to conduct business in this state. Such fee shall be imposed by rule adopted by the commissioner in accordance with the Administrative Procedure Act. The total fees assessed for any year shall not exceed the amount necessary to pay the costs of investigation, enforcement, public education and public awareness, and prosecution of insurance fraud in this state by the programs to which funds are allocated in Paragraph (4) of this Subsection. The total fee assessed in any year shall not exceed an amount equal to 0.000375 multiplied times the annual direct premium dollars received that are subject to the fee.
(2) The fee shall not be assessed on premiums received on life insurance policies, annuities, credit insurance, crop and livestock insurance, federal flood insurance policies, reinsurance contracts, reinsurance agreements, or reinsurance claims transactions. The fee shall not be assessed on fifty percent of the premiums received on health and accident insurance policies.
(3) On and after January 1, 2004, if the fee assessed for the previous year exceeds by five percent of the cumulative costs of the previous year of operating the insurance fraud programs to which funds are allocated, the fee assessment for the next year shall be reduced by the amount of the excess in proportion to the assessment; however, any entity listed in Subparagraph (4)(b) of this Subsection that expends its allocation shall receive at least the same allocation for the next year.
(4)(a) Prior to making the allocations specified in Subparagraph (b) of this Paragraph, the commissioner of insurance is authorized to withhold the sum of thirty thousand dollars per year from the fees collected pursuant to this Section to defray the expense of collection of the fees, enforcement of this Subpart, and operation of the Department of Insurance and shall withhold one hundred eighty-seven thousand dollars to fund the Louisiana Automobile Theft and Insurance Fraud Prevention Authority pursuant to R.S. 22:2134.
(b) Except as otherwise provided in Subparagraph (a) of this Paragraph, the fees collected shall be used solely for the purposes of this Subpart and shall be allocated as follows:
(i) Seventy-five percent of the fees collected shall be allocated to the insurance fraud investigation unit within the office of state police.
(ii) Fifteen percent of the fees collected shall be allocated to the Department of Justice to be used solely for the insurance fraud support unit.
(iii) Ten percent of the fees collected shall be allocated to the Department of Insurance to be used solely for the section of insurance fraud.
B. The fee established in this Section shall be paid to commissioner of insurance and shall be deposited immediately upon receipt into the state treasury.
C. After compliance with the requirements of Article VII, Section 9(B) of the Constitution of Louisiana relative to the Bond Security and Redemption Fund, an amount equal to that deposited as required by Subsection B of this Section shall be credited to a special statutorily dedicated fund account hereby created in the state treasury to be known as the Insurance Fraud Investigation Dedicated Fund Account, hereafter referred to in this Subsection as the "account". The monies shall be irrevocably dedicated and deposited in the account and shall be used solely as provided in Subsection A of this Section and only in the amounts appropriated by the legislature. Monies in the account shall be appropriated, administered, and used solely and exclusively for purposes of the fraud unit, fraud support unit, insurance fraud section, LATIFPA, and as further provided in this Section. All unexpended and unencumbered monies in the account at the end of the fiscal year shall be refunded to each insurer licensed by the Department of Insurance to conduct business in this state assessed a fee pursuant to this Section on a pro-rata basis based on each insurer's proportionate share of the total fees collected pursuant to this Section. Monies deposited into the account shall be categorized as fees and self-generated revenue for the sole purpose of reporting related to the executive budget, supporting documents, and general appropriation bills and shall be available for annual appropriation by the legislature.
D. The commissioner of insurance may levy a fine on any insurer who fails to pay the fee assessed pursuant to this Section when due. Such fine shall not exceed five percent of the fee per month; however, no fine shall be less than one hundred dollars per month.
Acts 1999, No. 1312, §4, eff. Jan. 1, 2000; Acts 2001, No. 369, §1; Acts 2003, No. 293, §2; Acts 2010, No. 1013, §2, eff. July 1, 2010; Acts 2021, No. 114, §10, eff. July 1, 2022.
NOTE: See R.S. 40:1429 regarding termination date of Subpart on July 1, 2024.