Creates the Louisiana Commercial Trucking Insurance Market Reform Act relative to captive insurers

This legislation creates a comprehensive regulatory framework for commercial trucking insurance in Louisiana by establishing the Louisiana Commercial Trucking Insurance Market Reform Act through new sections R.S. 22:550.33 through 550.53. The bill creates a special fund called the Louisiana Commercial Trucking Market Access Fund administered by the Department of Insurance and imposes an annual contribution requirement on all captive insurers covering Louisiana trucking risks equal to three percent of retained premium attributable to those risks. The bill also establishes the Louisiana Small Carrier Commercial Trucking Insurance Group Purchasing Pool as a nonprofit association to provide insurance access to small carriers with fewer than twenty-five commercial motor vehicles, implements minimum reserve and surplus requirements for captive insurers through actuarially sound calculations and liquid asset support, requires mandatory disclosure of insurance coverage information within thirty days of a claim notice, authorizes direct action against captive insurers by judgment creditors, and establishes enforcement mechanisms including suspension of operating authority for noncompliance with contribution requirements and civil penalties that flow into the Market Access Fund.

The bill directly affects captive insurers domiciled anywhere that cover Louisiana trucking risks, making compliance with contribution requirements a condition for affiliated trucking companies to operate in Louisiana. Small carriers with fewer than twenty-five vehicles gain access to subsidized insurance through the group purchasing pool funded initially from Market Access Fund contributions, with coverage satisfying all state financial responsibility requirements. Large national trucking companies utilizing captive arrangements face new regulatory burdens and cost transfers designed to address what the legislature identifies as adverse selection in the commercial insurance market. The Department of Insurance gains enforcement authority including examination rights at the captive insurer's expense, ability to suspend operating authority for non-payment of contributions, and authority to adjust contribution rates by rule. Local governments and injured claimants benefit from enhanced transparency requirements and direct action rights against captive insurers, while small and minority-owned trucking enterprises gain expanded affordable insurance options.

The legislation operates within Louisiana's existing insurance regulatory framework under Title 22 of the Louisiana Revised Statutes and specifically integrates with the administrative rules process governed by the Louisiana Administrative Procedure Act. The bill's application to out-of-state domiciled captive insurers raises federalism considerations by conditioning Louisiana operating authority on compliance with state-specific financial and contribution requirements. The legislation addresses the adverse selection phenomenon where high-quality risks exit the admitted insurance market through captive arrangements, leaving smaller carriers to bear higher premiums in the remaining market. The reserve and surplus requirements imposed on captive insurers mirror standards applicable to admitted insurers under Louisiana law, establishing actuarially sound reserve calculations supported by liquid assets with minimum thresholds based on central estimates or the seventy-fifth percentile of actuarial ranges. The bill integrates the Market Access Fund contributions as a regulatory tax mechanism to redistribute resources toward market access for underserved carriers while establishing accountability mechanisms through required annual reporting, actuarial certifications, and examination authority.

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