A.  An insurer may cancel any policy of insurance for failure to maintain membership in an organization if membership is a condition precedent to insurance coverage.

B.  Cancellation under this Section by the insurer of any policy or of any binder based on such policy, may be effected as to any interest only upon compliance with either or both of the following:

(1)(a)  Written notice of such cancellation must be actually delivered or mailed to the insured or to his representative in charge of the subject of the insurance not less than twenty days prior to the effective date of the cancellation.

(b)  Upon the written request of the named insured, the insurer shall provide to the insured in writing the reasons for cancellation of the policy.  There shall be no liability and no cause of action 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 Subparagraph.

(2)  Like notice must also be so delivered or mailed to each mortgagee, pledgee, or other known person shown by the policy to have an interest in any loss which may occur.

(3)  Where written notice of cancellation or nonrenewal is required and the insurer elects to mail the notice, the running of the time period between the date of mailing and the effective date of termination of coverage shall commence upon the date of mailing.

C.  The mailing of any such notice shall be effected by depositing it in a sealed envelope, directed to the addressee at his last address as known to the insurer or as shown by the insurer’s records, with proper prepaid postage affixed, in a letter depository of the United States Postal Service.  The insurer shall retain in its records any such item so mailed, together with its envelope, which was returned by the post office upon failure to find, or deliver the mailing to the addressee.

D.  The affidavit of the individual making or supervising such a mailing shall constitute prima facie evidence of such facts of the mailing as are therein affirmed.

E.  The portion of any premium paid to the insurer on account of the policy, unearned because of the cancellation and in an amount as computed on the pro rata basis, must be actually paid to the insured, or other person entitled thereto as shown by the policy or by any endorsements thereon, or be mailed to the insured, his representative, or such other person as soon as practicable following such cancellation.  Any such payment may be made by cash, check, bank draft, or money order.

Added by Acts 1976, No. 203, §1.  Amended by Acts 1985, No. 938, §1, eff. Jan. 1, 1986; Acts 1987, No. 510, §1; Acts 1988, No. 353, §1; Redesignated from La. Rev. Stat. 22:636.8 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 375, §1, eff. Jan. 1, 2011.