Section 12:1862 - InsolvenciesA. If the fund is insolvent, in addition to any other provision of law or rule, the department shall require that the fund files a written plan within sixty days from the date the fund becomes aware of the insolvency, and the plan shall be signed by the board of trustees. In determining the fund's insolvency, assets shall not include intangible property, such as patents, trade names, or goodwill. The plan submitted by the fund to eliminate the insolvency shall set forth in detail the means by which the fund intends to eliminate the insolvency and may include an assessment of the members of the fund including the timetable for implementation of the plan and requirements for reporting to the department. The department shall review the plan submitted by the fund and notify the fund of the plan's approval or disapproval within thirty days of the department's receipt of the plan.B. If the department determines that a plan submitted by the fund is disapproved or, once a plan has been approved by the department, that the fund is not implementing a plan in accordance with the terms of the plan, the department shall give written notification to the fund of its determination.C. If administrative supervision becomes necessary, the provisions of Subpart H of Part III of Chapter 2 of Title 22 of the Louisiana Revised Statutes of 1950 shall apply to the fund, and the department shall have administrative supervision over the fund in the same manner as if the fund were an insurance company.D.(1) In addition to any other powers of the department, if the group self-insurance fund is insolvent, operating in a hazardous financial condition, or operating in violation of the requirements of this Chapter, the department may institute delinquency proceedings against the fund, including entering an order for injunctive relief or placing the fund into administrative supervision pursuant to R.S. 22:731 et seq. or into receivership pursuant to R.S. 22:2001 et seq.(2) The department shall promulgate rules and regulations in accordance with the Administrative Procedure Act providing for the grounds, conduct, and procedures applicable to the delinquency proceedings.E. The distribution of general assets from the estate of the fund shall be prioritized as follows: (1) The department's costs and expenses of administration.(2) Payment of claims to third parties and insureds arising out of and within the coverage of agreements or evidences of coverage issued by the fund, up to the policy limits.(3) Payment of claims by the federal government other than those claims otherwise prioritized within this Subsection.(4) Payment of compensation owed to employees of the fund shall be paid in accordance with the applicable provisions of administrative supervision pursuant to R.S. 22:731 et seq. or receivership pursuant to R.S. 22:2001 et seq.(5) Payment of claims for unearned premiums or other premium refunds and claims of general creditors, including claims of any ceding and assuming company in their capacity as such.(6) Payment of all other claims.La. Corporations and Associations § 12:1862
Added by Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.