La. Admin. Code tit. 37 § XI-4833

Current through Register Vol. 50, No. 11, November 20, 2024

Section XI-4833 - Declaration of Default

A. The commissioner may declare a grantee in default of the requirements for a grant should it be found that any of the following exists.

1. The grantee fails at any time to meet the specific minimum requirements of §4813.A 1-4. The commissioner may take into consideration the effects of the Incentive Program, including efforts demonstrated by the grantee, when monitoring compliance with this criteria.

2. The grantee fails to maintain a certificate of authority for the line or lines of insurance written pursuant to the grant program.

3. The grantee fails to meet the specific requirements of §4821

4. The grantee fails to comply with any other applicable provisions of R.S. 22:2361 et seq., or Emergency Rule 48

B. If the commissioner determines that the grantee is in default, the commissioner shall notify the grantee in writing of such default. Any grantee declared in default by the commissioner shall have 30 days from the date of the declaration of default to request reconsideration by the commissioner. The written request for reconsideration shall set forth, in detail, each and every reason why the grantee is entitled to the relief requested, including any documents tendered in support thereof. The commissioner shall have 30 days from the mailing of the request for reconsideration to review it and render a decision. The commissioner's decision upon reconsideration may be appealed to the division of administrative law in accordance with R.S. 22:2191et seq. Unless modified on reconsideration or appeal, the default is effective from the date of the original declaration, and the grantee shall not be eligible to continue its participation in the Incentive Program unless the default is for failure to meet the requirements referenced in §4833.A.3

C. The grantee in default is liable for and shall repay all grant funds that have not been earned by the grantee, plus legal interest as defined in R.S. 13:4202(B) from the date of the commissioner's default declaration. In the event of default, a portion of the grant award for the current year may be earned on a pro rata basis to give credit for premiums written under the Incentive Program. Repayment on a pro rata basis shall be determined using a method prescribed by the commissioner. If a request for reconsideration is not timely made, repayment is due upon the expiration of 30 days from the declaration of default. If a request for reconsideration is timely made and denied, repayment is due within 10 days of the denial of the reconsideration request.

D.

1. In determining the pro rata earnings, the commissioner shall divide the actual amount of written premiums by the amount required to be written under the Incentive Program, in each of the following categories:

a. policyholders whose insured property is located in the parishes listed in §4815.B 3; and

b. the total amount of net premiums written by the grantee under the Incentive Program.

2. Each category is weighted equally at 50 percent, and credit shall be given based on the percentage of premiums written per category. The resulting factor is then multiplied by 50 percent of the amount the grantee is entitled to earn per category for each year of compliance under the Incentive Program (earned capital). The factor shall not exceed 1.00 for additional writings in any category. The sum of all categories shall equal the pro rata amount earned by the grantee.

E. The requirements for earning on a pro rata basis are illustrated by the following example assuming a grant of $5,000,000, presuming a maximum earned capital of $1,000,000 (20 percent per year entitlement assuming full compliance), and the grantee is declared in default.

Example: [The required amounts of premium for each of the two categories are listed in the table below under "Requirement." Each requirement equates to 50 percent of the earned capital for the earning period or $500,000. The "Actual" column represents the actual amount of writings by the grantee. The "Factor" column is the actual amount of writings divided by the requirement in each category. The "Earned" column represents the factor multiplied by $500,000. Thus, under this example, the amount of money earned by the grantee on a pro rata basis is $775,000.]

Category	Requirement	Weight	Actual	Factor	Earned
Total Net Written Premium	$20,000,000	50%	$15,000,000	.75	$375,000
Parishes listed in §4815.B 3[]	$10,000,000	50%	$8,000,000	.80	$400,000
				Total:	$775,000

F. The commissioner may institute legal action to recover all sums due by the grantee in default in the 19th Judicial District Court.

La. Admin. Code tit. 37, § XI-4833

Promulgated by the Department of Insurance, Office of the Commissioner, LR 49

AUTHORITY NOTE: Promulgated in accordance with Act No. 1 of the 2023 Extraordinary Session and Act No. 2 of the 2023 Extraordinary Session, R.S. 22:11, 22:2361 et seq., and the Administrative Procedure Act, R.S. 49:950 et seq.