§1265. Property, casualty, and liability insurance policies; cancellation and nonrenewal provisions; nonrenewal for rate inadequacy; certain prohibitions

A.(1) Any insurer cancelling or refusing to renew a policy providing property, casualty, or liability insurance on any property shall, upon written request of the policy's named insured, specify in writing the reason or reasons for such cancellation or refusal to renew. Such request shall be mailed or delivered to the insurer within six months after the effective date of cancellation or expiration.

(2) There shall be no liability and no cause of action of any nature against any insurer or its producers, employees, or representatives for any action taken by them to provide the reasons for cancellation as required by this Subsection.

(3) Any nonrenewal for which the reason, in whole or in part, is inadequacy or insufficiency of the rate or premium for coverage shall be permitted only after the insurer has sought actuarially justified rate relief from the commissioner of insurance and such rate relief has been rejected by the commissioner.

B. There shall be no liability and no cause of action of any nature against the commissioner of insurance or against any insurer, its authorized representative, its producers, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or refusal to renew, or in any other communication, oral or written, specifying the reasons for cancellation or refusal to renew, or the providing of information pertaining thereto, or for statements made or evidence submitted at any hearings conducted in connection therewith.

C. No insurer providing property, casualty, or liability insurance shall cancel or refuse to issue or fail to renew a homeowner's policy solely on the basis that the insured owns or possesses an all-terrain vehicle (ATV). The provisions of this Subsection shall not prohibit an insurer providing property, casualty, or liability insurance from specifically excluding coverage for damage incurred or arising from the operation of an all-terrain vehicle.

D. No insurer providing property, casualty, or liability insurance shall cancel or fail to renew a homeowner's policy of insurance or to increase the policy deductible that has been in effect and renewed for more than three years unless based on nonpayment of premium, fraud of the insured, a material change in the risk being insured, two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date, or if continuation of such policy endangers the solvency of the insurer. This Subsection shall not apply to an insurer that withdraws from the homeowners' insurance market in this state or to policy deductibles increased for all homeowners' policies in this state. For the purposes of this Subsection, an incident shall be deemed a claim only when there is a demand for payment by the insured or the insured's representative under the terms of the policy. A report of a loss or a question relating to coverage shall not independently establish a claim. As used in this Subsection, the phrase "two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date" shall not include any loss incurred or arising from an "Act of God" incident which is due directly to forces of nature and exclusively without human intervention.

E. The department shall review annually every insurer that cancels or fails to renew any insurance policy providing property, casualty, or liability insurance on any property which policy has been in effect and renewed for more than three years when the cancellation or nonrenewal is based on the reason that continuation of the policy endangers the solvency of the insurer or when based on the reason, in whole or in part, of inadequacy or insufficiency of the rate or premium for coverage after the insurer has sought actuarially justified rate relief from the commissioner and such relief has been rejected by the commissioner. Any action against an insurer taken by the department for a violation of the provisions of this Section shall remain in effect until changed or modified by the commissioner based upon the review required under the provisions of this Subsection.

F. Notwithstanding the provisions of Subsection D of this Section, an insurer may make a filing with the commissioner pursuant to R.S. 22:1464 for authorization to deviate from the provisions of Subsection D of this Section for the sole purpose of changing the policy deductible to a total deductible of not more than four percent of the value of the property being insured for named storms or hurricanes on a homeowner's policy of insurance that has been in effect for more than three years. Any insurer filing with the commissioner pursuant to this Subsection shall file with the commissioner a business plan setting forth the insurer's plan to write new business in the particular region or area of the state in which the new deductible is to apply. The commissioner's approval is to be based on the insurer's commitment to the writing of new business in the respective region or area of the state in which the new deductible is to apply. The commissioner may also approve a filing that he determines to be in the best interest of the policyholders. The commissioner may subsequently rescind his approval of any filing made pursuant to this Subsection in the event the insurer fails to write new business in accordance with the business plan. Any business plan filed shall be considered proprietary or trade secret pursuant to information under the provisions of R.S. 44:3.2 and the Uniform Trade Secrets Act. The commissioner shall provide an annual report to the legislative committees on insurance on the application and effectiveness of the provisions of this Section. The commissioner shall promulgate regulations pursuant to the Administrative Procedure Act setting forth the criteria for the filing, including any financial or other requirements that he deems necessary to act on the request by an insurer. Any regulation promulgated by the commissioner pursuant to this Subsection shall require the insurer to itemize to the insured the premium savings based on the increase in the insured's deductible.

G. No homeowner's policy of insurance shall contain any provision that would apply more than one deductible to a loss resulting from any single incident covered by the policy. Any such provision shall be null and void and unenforceable as contrary to public policy.

H. Any company which makes a filing pursuant to Subsection F of this Section shall reduce the rates paid by the individual homeowner by the amount determined to be actuarially justified by the commissioner.

I. Any authorized property and casualty insurer that avails itself of the provisions of Subsection D of this Section relative to withdrawing from the homeowners' insurance market may not issue any homeowners' insurance coverage in this state during the five-year period beginning on the date of the discontinuation of the last homeowners' insurance coverage not so renewed. The commissioner may, for good cause shown pursuant to a written request by the insurer, permit the insurer to reenter the homeowners' insurance market prior to the expiration of the five-year period.

J. Any approved unauthorized property and casualty insurer that avails itself of the provisions of Subsection D of this Section relative to withdrawing from the homeowners' insurance market may not issue any homeowners' insurance coverage in this state during the five-year period beginning on the date of the discontinuation of the last homeowners' insurance coverage not so renewed. The commissioner may, for good cause shown pursuant to a written request by the insurer, permit the insurer to reenter the homeowners' insurance market prior to the expiration of the five-year period.

Added by Acts 1968, No. 51, §1; Acts 1987, No. 510, §1; Acts 1988, No. 953, §1, eff. Sept. 1, 1988; Acts 1991, No. 840, §1; Acts 1992, No. 594, §1; Acts 1996, 1st Ex. Sess., No. 71, §1, eff. May 10, 1996; Acts 2004, No. 826, §1; Acts 2007, No. 381, §1, eff. July 10, 2007; Acts 2007, No. 459, §4, eff. Jan. 1, 2008; Redesignated from R.S. 22:636.2 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2008, No. 440, §1; Acts 2008, No. 854, §1, eff. July 9, 2008; Acts 2010, No. 703, §1, eff. Jan. 1, 2011; Acts 2014, No. 353, §1.

NOTE: Former R.S. 22:1265 redesignated as R.S. 22:439 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.