Louisiana Revised Statutes 22:601.18 – An insurer shall not, directly or indirectly, do any of the following:
Terms Used In Louisiana Revised Statutes 22:601.18
- Affiliate: means , as to any person, another person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person. See Louisiana Revised Statutes 22:601.1
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- directly: when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation. See Louisiana Revised Statutes 22:601.1
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Option: means an agreement giving the buyer the right to buy or receive, known as a "call option" sell or deliver, known as a "put option" enter into, extend or terminate or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests. See Louisiana Revised Statutes 22:601.1
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: means an individual, a business entity, a multilateral development bank, or a government or quasi-governmental body, such as a political subdivision or a government-sponsored enterprise. See Louisiana Revised Statutes 22:601.1
- Real estate: means :
(a) Any of the following:
(i) Immovable property. See Louisiana Revised Statutes 22:601.1
- Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
An insurer shall not, directly or indirectly, do any of the following:
(1) Engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this Subpart.
(2) Invest in a partnership as a general partner, except that an insurer may make an investment as a general partner if all other partners in the partnership are subsidiaries of the insurer. This Paragraph shall not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.
(3) Invest in or lend its funds upon the security of shares of its own stock, except that an insurer may acquire shares of its own stock for the following purposes, but the shares shall not be admitted assets of the insurer:
(a) Conversion of a stock insurer into a mutual or reciprocal insurer or a mutual or reciprocal insurer into a stock insurer.
(b) Issuance to the insurer’s officers, employees, or agents in connection with a plan approved by the commissioner for converting a publicly held insurer into a privately held insurer or in connection with other stock option and employee benefit plans.
(c) In accordance with any other plan approved by the commissioner.
(4) Invest in goodwill, trade names, and other intangible assets, except as provided for pursuant to La. Rev. Stat. 22:601.16(17).
(5) Invest in stock of the insurer owned by it, or any equity therein, or loans secured thereby or any material proportionate interest in the stock acquired, or held, through the ownership by the insurer of an interest in another firm, corporation, or business unit.
(6) Invest in furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literature, and supplies, except for the following:
(a) The movable property as is required through foreclosure of chattel mortgages under loans insured or guaranteed under provisions of the National Housing Act or any act of congress relating to veterans benefits.
(b) That which is reasonably necessary for the maintenance and operation of real estate held by it other than real estate for a home office, branch office, and similar purposes.
(c) In the case of title insurers, abstract plant and equipment not to exceed fifty percent of the paid-in capital stock of such title insurer.
(7) Invest in an amount, if any, by which the aggregate book value of investments, as carried in the assets of the insurer, exceeds the aggregate value, as determined under the provisions of this Title.
(8) Invest in rental assets, which for the purposes of this Section shall include but not be limited to the following:
(a) Any item carried as an asset on the insurer’s balance sheet, which is not, in fact, owned by the insurer.
(b) Any item carried as an asset on the insurer’s balance sheet, the ownership of which is subject to resolution, rescission, or revocation upon the insurer’s insolvency, receivership, bankruptcy, statutory supervision, rehabilitation, liquidation, or upon the occurrence of any other contingency.
(c) Any item carried as an asset on the insurer’s balance sheet for which the insurer pays a regular or periodic fee for the right to carry such items as an asset, whether or not such fee is characterized as a rental, a management fee, or an extraordinary dividend not previously approved by the commissioner, or other periodic payment for such right.
(d) Any asset purchased by the insurer on credit whereby the interest rate paid by the insurer on its credit instrument is greater than the interest rate or yield generated by the purchased asset.
(e) Any asset received by the company as a contribution to capital from any affiliate, holding company, or control person, or from any affiliate of any such affiliate, holding company, or control person, which meets any of the criteria set forth in Subparagraphs (a) through (d) of this Paragraph while in the hands of such contributing party, or at the moment of such contribution to capital, or thereafter.
(9) Invest in premium notes on policies and certificates of life insurance and annuity contracts, and accrued interest thereon, except when the insurer, issuer, or noteholder agrees to an examination by the department to determine whether any inflation or duplication of assets exists.
(10) Pay any commission or brokerage for the purchase or sale of property in excess of that usual and customary at the time and in the locality where such purchases or sales are made, and information regarding all payments of commissions and brokerage shall be reported in the next annual statement.
Acts 2021, No. 165, §1, eff. Jan. 1, 2022.