Louisiana Revised Statutes 22:601.20 – A. An insurer shall not, directly or indirectly, do any of the following:
Terms Used In Louisiana Revised Statutes 22:601.20
- Business entity: includes a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy, or other similar form of business organization, whether organized for-profit or not-for-profit. See Louisiana Revised Statutes 22:601.1
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- 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
- Fraud: Intentional deception resulting in injury to another.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: means a bond, note, debenture, trust certificate including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, and other evidence of indebtedness for the payment of money, or participations, certificates, or other evidences of an interest in any of the foregoing, whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment. See Louisiana Revised Statutes 22:601.1
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- 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
A. An insurer shall not, directly or indirectly, do any of the following:
(1) Invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer, director, or controlling stockholder of the insurer.
(2) Invest in or loan upon any real estate which is owned or partly owned by any officer, director, or controlling stockholder of the insurer, nor shall any such insurer invest in or loan upon any bond or note secured by mortgage or trust deed on real estate if an officer, director, or controlling stockholder of such insurer is an owner or part owner of the real estate upon which the loan is made.
(3) Invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which ten percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers, directors, or controlling stockholders of the insurer, except as authorized in La. Rev. Stat. 22:691.7.
B. No insurer shall, without the prior written approval from the commissioner of insurance, directly or indirectly do any of the following:
(1) Make a loan to or other investment in an officer, director, or controlling stockholder of the insurer or a person in which the officer, director, or controlling stockholder has any direct or indirect financial interest.
(2) Make a guarantee for the benefit of or in favor of an officer, director, or controlling stockholder of the insurer or a person in which the officer, director, or controlling stockholder has any direct or indirect financial interest.
(3) Enter into an agreement for the purchase or sale of property from or to an officer, director, or controlling stockholder of the insurer or a person in which the officer, director, or controlling stockholder has any direct or indirect financial interest.
C. An insurer may make, without the prior written approval of the commissioner, policy loans in accordance with the terms of the policy or contract issued to an officer, director, or controlling stockholder.
D. This Section shall not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with La. Rev. Stat. 22:691.7, other than a transaction between an insurer and its officers, directors, or controlling stockholders.
E. Any officer, director, or controlling stockholder knowingly participating in or abetting the violation of any provision of this Section where fraud is shown to exist shall be fined not less than one thousand dollars nor more than ten thousand dollars, or imprisoned not more than ten years, or both.
Acts 2021, No. 165, §1, eff. Jan. 1, 2022.