2006 Louisiana Laws - RS 22:1395.3 — Coverages and limitations

§1395.3.  Coverages and limitations

A.  This Part shall provide coverage for the policies and contracts specified in Subsection B of this Section:

(1)  To any person who, regardless of residence, except for a nonresident certificate holder under a group policy or contract, is the beneficiary, assignee, or payee of a person covered under Paragraph (2) of this Subsection.  

(2)  To any person who is the owner of or certificate holder under such a policy or contract, and who:

(a)  Is a resident; or

(b)  Is not a resident, but only if all of the following conditions are satisfied:

(i)  The insurer which issued such policy or contract is domiciled in this state.  

(ii)  The insurer has never held a license or certificate of authority in the state in which such person resides.  

(iii)  Such state has an association similar to the association created by this Part.  

(iv)  The person is not eligible for coverage by such association.  

B.(1)  This Part shall provide coverage to the persons specified in Subsection A of this Section for direct nongroup life, health, annuity and supplemental policies or contracts, for certificates under direct group policies and contracts, and for unallocated annuity contracts issued by member insurers, except as limited by this Part.  

(2)  This Part shall not provide coverage for:

(a)  Any portion of a policy or contract not guaranteed by the insurer, or under which the risk is borne by the policy or contract holder.  

(b)  Any policy or contract of reinsurance, unless assumption certificates have been issued.  

(c)  Any portion of a policy or contract to the extent that the rate of interest on which it is based:

(i)  Averaged over the period of four years prior to the date on which the association becomes obligated with respect to the policy or contract exceeds a rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the association became obligated.  

(ii)  On and after the date on which the association becomes obligated with respect to the policy or contract, exceeds the rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available.  

(d)  Any plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its employees or members to the extent that such plan or program is self-funded or uninsured, including but not limited to benefits payable by an employer, association, or similar entity under:

(i)  A Multiple Employer Welfare Arrangement as defined in 29 U.S.C. Section 514 *(the Employee Retirement Income Security Act of 1974) as amended.  

(ii)  A minimum premium group insurance plan.  

(iii)  A stop-loss group insurance plan.  

(iv)  An administrative services only contract.  

(e)  Any portion of a policy or contract to the extent that it provides dividends, premium refunds, or experience rating credits, or provides that any fees or allowances be paid to any person, including the policy or contract holder, in connection with the service to or administration of such policy or contract.  

(f)  Any policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue such policy or contract in this state.  

(g)  Any unallocated annuity contract except unallocated annuity contracts and defined contribution government plans qualified under Section 403(b) of the United States Internal Revenue Code (26 U.S.C. 403(b)).  

C.  The benefits for which the association shall become liable shall in no event exceed the lesser of:

(1)  The contractual obligations for which the insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or

(2)  With respect to any one life, regardless of the number of policies or contracts:

(a)  Three hundred thousand dollars in life insurance death benefits, but not more than one hundred thousand dollars in net cash surrender and net cash withdrawal values for life insurance.  

(b)  One hundred thousand dollars in health insurance benefits, including any net cash surrender and net cash withdrawal values.  

(c)  One hundred thousand dollars in the present value of annuity benefits, including net cash surrender and net cash withdrawal values.  

D.  However, in no event shall the association be liable to expend more than three hundred thousand dollars in the aggregate with respect to any one individual under Subsection C.  

E.  The liability of the association and benefits paid by the association under any valid act of assignment of benefits pursuant to Subsection C of this Section for any claim under a health policy shall be an amount payable under Title XVIII of the Social Security Act, 42 U.S.C. §301 et seq.  The board of directors of the association shall establish reasonable amounts for any services or supplies covered under a health policy or contract for which an amount has not been determined under the federal Medicare program.  A health care provider, defined in R.S. 40:1299.41, shall not bill any person covered by a health policy or contract for which the association has become liable for the amount of any bill in excess of the amount paid by the association.  

Acts 1991, No. 998, §1, eff. Sept. 30, 1991.  

*AS APPEARS IN THE ENROLLED BILL.