§1406. Conflict of interest

A. Notwithstanding that Chapter 15 of Title 42 of the Louisiana Revised Statutes of 1950 is not applicable to the corporation or to its board members, officers, or employees or to any spouse, sibling, ascendant, or descendant of a board member, officer, or employee of the corporation, the following provisions shall apply:

(1)(a) Except for a member of the board, no officer or employee of the corporation, or any spouse, sibling, ascendant, or descendant of the officer or employee shall have a financial interest in any entity doing business or proposing to do business with the corporation, except that an officer may be a policyholder.

(b) Any member of the board or any spouse, sibling, ascendant, or descendant of any member of the board who has a financial interest in any entity doing business or proposing to do business with the corporation, other than as a policyholder, shall disclose, in writing, the following:

(i) The nature, amount, and extent of the financial interest.

(ii) The name, address, and relationship to the board member, if applicable.

(iii) The name and business address of the legal entity involved, if applicable.

(c) The disclosure statement required in Subparagraph (b) shall be initially filed with the corporation and the secretary of state within thirty days of the member's commencement of service on the board or within thirty days after the matter subject to disclosure arises, whichever later occurs, and shall be filed thereafter annually, to the extent required, by May first, which annual report shall include such information for the previous calendar year. The statements shall be a matter of public record.

(d) As used in this Paragraph, "financial interest" means ownership by an individual or his spouse, either individually or collectively, of an interest which exceeds five percent of any legal entity.

(2)(a) Except for a member of the board, no officer or employee of the corporation who leaves the service or employ of the corporation may represent any person doing business or proposing to do business with the corporation for a period of two years following termination of service or employment with the corporation, except that an officer may be a policyholder.

(b) Any member of the board who leaves the board, and who does not serve as an officer or employee of the corporation, may represent any person doing business or proposing to do business with the corporation within a period of two years following termination of service on the board, other than as a policyholder, only if within thirty days of such representation, the board member files a written statement with the corporation and with the secretary of state disclosing the following:

(i) The nature, amount, and extent of the board member's relationship with the person.

(ii) The name and business address of the person involved and nature of the business or proposed business with the corporation.

(c) The statements filed pursuant to this Paragraph shall be public records.

B.(1) No spouse, sibling, ascendant, or descendant of a board member or officer or employee of the corporation shall be employed by the corporation.

(2) Any spouse, sibling, ascendant, or descendant of a board member or officer or employee of the corporation employed by the corporation on June 21, 1993, whose employment would otherwise be in violation of this Subsection, may continue his employment and this Subsection shall not be construed to hinder, alter, or in any way affect normal promotional advancements for the employee.

(3) This Subsection shall not prohibit the continued employment of any employee nor shall it be construed to hinder, alter, or in any way affect normal promotional advancements for the employee when a spouse, sibling, ascendant, or descendant of the employee becomes a member of the board, provided that the employee has been employed by the corporation for a period of at least one year prior to the spouse, sibling, ascendant, or descendant becoming a member of the board.

C.(1) No officer or employee of the corporation shall solicit or accept, directly or indirectly, any thing of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if the officer or employee knows or reasonably should know that such person either:

(a) Has or is seeking to obtain contractual or other business or financial relationships with the corporation.

(b) Is seeking, for compensation, to influence the passage or defeat of any rule or rate by the corporation.

(c) Conducts operations or activities which are regulated by the corporation.

(d) Has a financial interest which may be substantially affected by the performance or nonperformance of the officer's or employee's stated duty.

(2)(a) Written disclosure shall be made by any member of the board who shall solicit or accept, directly or indirectly, any thing of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if the board member knows or reasonably should know that such person either:

(i) Has or is seeking to obtain contractual or other business or financial relationships with the corporation.

(ii) Is seeking, for compensation, to influence the passage or defeat of a rule or rate by the corporation.

(iii) Conducts operations or activities which are regulated by the corporation.

(iv) Has a financial interest which may be substantially affected by the performance or nonperformance of the member's stated duty.

(b) The disclosure required by Subparagraph (a) shall include the following:

(i) The name and business address of the person involved and the relationship to the board member, if applicable.

(ii) The name and address of any officer, director, agent, or employee of the person involved and the relationship to the board member, if applicable.

(iii) The contractual or other business or financial relationship sought with the corporation, if applicable.

(iv) The regulation sought to be influenced, if applicable.

(v) The corporation-regulated operations or activities conducted by the person involved, if applicable.

(vi) The financial interest of the person involved which may be substantially affected by the performance or nonperformance of the member's stated duty, if applicable.

(c) The disclosure statement required by Subparagraph (a) shall be filed with the corporation and the secretary of state within thirty days of the member's solicitation or acceptance of the thing of economic value and shall be a matter of public record.

(3) As used in this Subsection, "thing of economic value" means money or any other thing having a value in excess of fifty dollars such as food, drink, or refreshments consumed by a board member, officer, or employee of the corporation, including reasonable transportation and entertainment incidental thereto, while the personal guest of some person.

D. Any person who violates any provision of this Section or who knowingly makes a false statement in any disclosure required by this Section may be fined not more than five thousand dollars.

E.(1) Nothing in this Section shall require disclosure by a board member appointed pursuant to and in accordance with Article XII, Section 8.1(C)(1)(f) of the Constitution of Louisiana of information regarding the sale or offer to sell of workers' compensation insurance as an agent licensed by the Department of Insurance.

(2) Nothing in this Section shall require disclosure by a board member appointed pursuant to and in accordance with Article XII, Section 8.1(C)(1)(g) of the Constitution of Louisiana of information regarding the issuance of workers' compensation insurance as a representative of insurers licensed by the Department of Insurance to issue worker's compensation insurance.

Acts 1991, No. 814, §1, eff. Nov. 20, 1991; Acts 1993, No. 715, §1, eff. June 21, 1993.