Louisiana Department of Insurance Office of Consumer Advocay

Volume 1, Issue 6
SEPTEMBER 2010

Quad Area Community Action Agency Senior Corp Information Day
9/21/2010
9:30 a.m. - 1:00 p.m.
Quad Area CAA
45300 North Baptist Road
Hammond, LA

Youth Financial Educators Seminar
9/27-28/2010
11:30 a.m. - 6:30 p.m. (27th)
7:00 a.m. -3:30 p.m. (28th)
Crowne Plaza
Baton Rouge, LA

 

If you missed a previous newsletter, or would like to read past issues, they are all archived at www.ldi.la.gov under the consumer section.

To find out if Consumer Advocacy will be in your area or to request a speaker for your organization or group, call (225) 219-0619 or send an email to
consumeradvocacy@ld.la.gov

If you no longer wish to receive this newsletter please send an email to the following address with "REMOVE" in the subject line.
consumeradvocacy@ld.la.gov

Uninsured/Underinsured Motorist Coverage
Louisiana law requires all vehicles carry auto liability insurance in the amount of 15-30-25, meaning the insurance of the driver found to be at fault in an accident would pay up to $15,000 bodily injury liability per person in an accident, up to $30,000 for bodily injury liability for two or more persons in an accident, and up to $25,000 for the other vehicle’s property damage liability.  However, approximately 12% of all drivers in Louisiana do not carry any liability coverage on their vehicles.  This means that if you have an accident that is not your fault, there is a possibility that the other driver may not have any liability insurance. For this reason, many drivers feel the need to purchase uninsured/underinsured motorist coverage.
 
Uninsured/underinsured motorist coverage pays benefits to you if your vehicle is hit by a driver who does not have any insurance or a driver who has too little insurance to pay for the full amount of your injuries and damages.  Bodily injury you or an occupant of your vehicle suffers due to an accident caused by another driver would be covered under this portion of the policy.  Hit-and-run drivers can be classified as uninsured motorists.  If you do not have comprehensive or collision coverage on your policy, uninsured/underinsured motorist property damage coverage would cover damage to your vehicle if you were involved in an accident with an uninsured driver. 

Without uninsured/underinsured motorist coverage, you take the chance of having to pay for your own injuries and damages if you get hit by an uninsured driver.  Review your policy to see if you have this coverage and ask your producer how much it would cost to add uninsured/underinsured motorist coverage to your policy if you do not already have it.
Senior Health Insurance Information Program (SHIIP)

The Senior Health Insurance Information Program (SHIIP) through the Louisiana Department of Insurance (LDI) offers specialized services to senior citizens and Medicare beneficiaries. SHIIP is a program funded by a grant from the Centers for Medicare and Medicaid Services (CMS), to provide counseling and assistance to seniors who need health insurance information.

SHIIP’s mission is to see that senior citizens and Medicare beneficiaries of Louisiana do not fall prey to complicated policies, misleading advertisements, or unscrupulous producers or insurance companies.

SHIIP counselors provide counseling, free of charge, on a variety of topics regarding health insurance, including:

  • Understanding the paperwork and statements that you receive after a doctor visit, hospital stay or other medical experience.
  • Reviewing and understanding your supplemental and long term care insurance.
  • Providing assistance with Medicare Claims filing or appeals if payment for a service has been denied.
  • Explaining your options for private insurance to supplement your Medicare insurance.

SHIIP counselors offer advisory information only and do not make decisions for clients, provide legal assistance, or promote specific products or offer policies for sale. All information shared with a counselor is kept strictly confidential. The counselor will at no time attempt to sell the client anything. Information is given to clients to assist them in making informed decisions. SHIIP counselors never charge for this service.

SHIIP offers a wide range of information and materials through the Department of Insurance's toll-free telephone line. To request information, counseling, publications, a speaker for a group or information on becoming a sponsor, you may call (800) 259-5301 to reach a staff person or visit the website at www.ldi.la.gov.
Stranger Originated Life Insurance Transactions
Louisiana law requires that an individual purchasing life insurance has an insurable interest to obtain coverage on another individual.   The principle of insurable interest means that the policy owner must suffer some form of immediate loss or direct financial loss due to the death of the insured individual.   Examples of insurable interests are a spouse, a child, or a business partner.  Stranger originated life insurance (STOLI) lacks the presence of an insurable interest.  STOLI is an agreement made by a consumer and a broker or third-party investor to sell the consumer’s life insurance policy for a profit.  This practice is sometimes seen as a gamble on the insured’s life expectancy.

The Louisiana Department of Insurance (LDI) issued Bulletin No. 06-05 to bring attention to the life insurer underwriting practices in Louisiana.  As a result of brokers and investors taking an interest in making inappropriate actions to make a profit from an individual’s life insurance policies, premium financing of life insurance policies have become a focal point of insurance underwriting.  Life insurance underwriting may not discriminate against applicants for life insurance based solely on the intention of the insured to subsequently sell the life insurance policy to a life settlement company or on the method of payment presented to pay the premium.  It is important that insurance companies and insurance consumers are aware of the existence of STOLI transactions.

Life insurance companies are obligated to:
  • Establish detection measures to identify STOLI, questionable applications related to such transactions, and any insurance producers who may be involved in the facilitation of these improper agreements.
  • Ensure that an application does not violate the applicable provisions of the Louisiana Insurance Code.
  • Ascertain whether life insurance applications are completed correctly and information is accurate.
  • Report potential STOLI transactions to the LDI.

Insurance consumers are encouraged to be cautious:

  • Of any individual willing to pay you to purchase new life insurance.
  • Of individuals attempting to purchase your existing life insurance policies.
  • If your producer is entering information on the application for you, be certain that he does not enter any information that is untrue, incomplete or incorrect.

    If you feel uncomfortable about an insurance transaction. contact the LDI at (800) 259-5300 -or- (225) 342-5900.
Tips for preventing your vehicle from being stolen

Vehicle theft is something that can happen to anyone, so it is necessary to take the proper precautions.  Vehicle theft is not just a petty crime committed by teenagers in urban and suburban areas anymore.  It has quickly become one of the biggest businesses run by organized crime rings.  Vehicles are stolen intentionally, not accidentally, and auto theft constitutes a significant economic loss to societyStolen cars are in great demand for different uses such as residential and commercial robberies, check and credit card fraud schemes, identity theft activities, illegal drug trafficking and even drive-by shootings. 

In 2008, the state of Louisiana ranked 20th in the nation in total number of vehicles stolen with 13,743 vehicle thefts that year, according to the 2008 FBI Uniform Crime Report.  There are more than 245 million vehicles on the road today, up from 122 million ten years ago, which means more opportunity for criminals. Most cars today are made with theft prevention devices.  There are numerous ways we can prevent vehicle thefts from occurring, but most people simply don’t take the time to utilize the precautionary measures.

Make your vehicle a tough target for criminals by using the following tips:
 

  • Lock your doors
  • Remove your keys from the ignition
  • Close your windows completely when not in the vehicle
  • Don’t hide a second set of keys anywhere on your car
  • Don’t leave items in plain view
  • Park with wheels turned toward the curb making your car hard to tow
  • Use emergency brakes when parking
  • Park in well-lit areas
  • Install audible alarm systems
  • Use steering wheel locks
  • Use tire locks
  • Etch vehicle windows with VIN numbers
  • Use Smart Keys with computer chips
For further information, contact the Louisiana Automobile Theft & Insurance Fraud Prevention Authority (LATIFPA) at the Louisiana Department of Insurance. LATIFPA may be reached by calling (225) 342-0819 or visit the website at www.ldi.la.gov.
EDITOR’S LETTER

Increased Consumer Protection

As a result of Act 959 of the 2010 Regular Session, the Louisiana Insurance Guaranty Association (LIGA) now provides increased coverage for Louisiana policyholders.  The association provides payment to policyholders, for covered claims under certain insurance policies, due to the insolvency of an insurer.  The maximum amount that can be paid on a covered claim has increased from $300,000 to $500,000 per accident or occurrence, up from the $150,000 maximum three years ago.  The Louisiana Department of Insurance continuously monitors the financial behavior of regulated entities; however, sometimes there are unexpected economic difficulties that cannot be foreseen. Policyholders should now feel more comfortable that their claims can be covered up to the $500,000 maximum, even if their insurance company runs into financial problems. 

Deputy Commissioner
Clarissa A. Preston, CIC, APIR

Office of Consumer AdvocacyP.O. Box 94214Baton Rouge, LA 70804-9214
(225) 219-0619 or (800)259-5300www.ldi.la.govconsumeradvocacy@ldi.la.gov