1.4 License Denial, Suspension, Revocation, Fines & Commissioner Enforcement (RS 22:1672, 22:1967–1970)
Key Takeaways
- The commissioner may place on probation, suspend, revoke, or refuse to issue, renew or reinstate an adjuster license under R.S. 22:1672(A).
- Unless another statute authorizes more, a licensing fine under R.S. 22:1672(A) cannot exceed $500 per violation or $10,000 aggregate per calendar year.
- A felony conviction, a nolo contendere plea to a felony, or participation in felony pretrial diversion is a license ground under R.S. 22:1672(A)(6).
- Under R.S. 22:1969, unfair trade practice fines reach $1,000 per violation up to $100,000 aggregate, or $25,000 per violation up to $500,000 in six months if the person knew or should have known.
- Violating a commissioner cease-and-desist order can bring fines of up to $25,000 per violation, capped at $250,000 aggregate, plus license suspension or revocation (R.S. 22:1970).
Who Enforces Louisiana Adjuster Law
The Commissioner of Insurance, a statewide elected official who heads the Louisiana Department of Insurance, enforces Title 22. For adjusters, the enforcement tools come from two places:
- The Claims Adjuster Act (R.S. 22:1672): license-based discipline.
- The Unfair Trade Practices Part (R.S. 22:1961–1972): cease-and-desist orders and monetary penalties. Claims adjusters are subject to this Part under R.S. 22:1671(E), and violations of the adjuster standards of conduct are treated as unfair trade practices under R.S. 22:1674.1(C).
The Sanction Menu (R.S. 22:1672(A))
For any listed cause, the commissioner may use any combination of the following:
- probation;
- suspension;
- revocation;
- refusal to issue, renew or reinstate the license; and
- a fine of up to $500 per violation, up to $10,000 aggregate for all violations in a calendar year, unless a separate statute in Title 22 authorizes a greater penalty.
Under R.S. 22:1672(D), a licensee may be fined in addition to denial, suspension or revocation. R.S. 22:1672(E) lets the commissioner enforce the law against a person under investigation or charged even after the license has been surrendered or has lapsed.
The Eighteen Grounds
| # | Ground |
|---|---|
| 1 | Incorrect, misleading, incomplete or materially false information in a license or renewal application |
| 2 | Violating insurance laws or regulations of the U.S., Louisiana or any other jurisdiction, or a subpoena or order of the Louisiana commissioner or another state's commissioner |
| 3 | Obtaining or trying to obtain a license through misrepresentation or fraud, or cheating on any insurance license examination, including improper use of notes or reference material |
| 4 | Improperly withholding, misappropriating or converting money or property received in insurance business |
| 5 | Intentionally misrepresenting the terms of an actual or proposed insurance contract, binder, rider, plan or application, including attached forms |
| 6 | Conviction of, or nolo contendere plea to, any felony; felony pretrial diversion; suspension or deferral of sentence and probation under Code of Criminal Procedure Art. 893 or a similar law; or conviction of a misdemeanor involving moral turpitude, public corruption or the adjustment of insurance claims |
| 7 | Admitting to or committing fraud or unfair trade practices |
| 8 | Fraudulent, coercive or dishonest practices, or incompetence, untrustworthiness or financial irresponsibility that might endanger the public |
| 9 | Denial, suspension or revocation of an insurance license or its equivalent in any other state, province, district or territory |
| 10 | Forging a name on an application for insurance or any document related to an insurance transaction |
| 11 | Knowingly accepting insurance business from an unlicensed person who must be licensed |
| 12 | Failure to comply with an administrative or court order imposing a child support obligation |
| 13 | Failure to pay state income tax or comply with an order directing payment of state income tax |
| 14 | Refusing to submit physical evidence of identity, or a felony conviction, as provided in R.S. 22:1922(B) and (C) |
| 15 | Employing or associating with anyone in the business of insurance who has a felony conviction in any jurisdiction |
| 16 | A felony involving dishonesty or breach of trust under 18 U.S.C. 1033 and 1034 without the commissioner's written consent |
| 17 | Violating R.S. 22:1674(F), a cross-reference to the former standards section that Act 402 of 2021 repealed; today's standards are in R.S. 22:1674.1 |
| 18 | Failing to complete an adjustment assignment in a thorough and timely manner, including submitting the adjustment to the party that made the assignment |
Notice, Hearings and Business Entities
- Written reasons: when the commissioner denies an application or refuses to renew a license, the applicant or licensee receives written notice of the reason, in compliance with R.S. 49:977.3 (R.S. 22:1672(B)).
- Hearing rights: a person aggrieved by the commissioner's decision, act or order may demand a hearing under Chapter 12 of Title 22, R.S. 22:2191 et seq.
- Business entity accountability: a business entity's license may be suspended, revoked or refused if one or more partners, officers or managers knew or should have known of an individual licensee's violation and did not report it (R.S. 22:1672(C)).
Criminal History and 1033 Consent
Under 18 U.S.C. 1033 and 1034, a person convicted of a felony involving dishonesty or breach of trust may not participate in the business of insurance without the insurance commissioner's written consent. The LDI decides whether consent is needed, and whether to grant it, while it reviews the license application. Resident applicants who disclose criminal history complete a Criminal History Disclosure Form. Under R.S. 37:33, an individual may also request an optional pre-application eligibility determination before applying or testing.
Unfair Trade Practices Enforcement (R.S. 22:1967–1970)
| Step | Statute | What happens |
|---|---|---|
| Investigation | R.S. 22:1967 | The commissioner may examine and investigate the affairs of every person in the business of insurance to find unfair methods of competition or unfair or deceptive acts |
| Notice | R.S. 22:1968 | Notice of hearing issued to the person charged |
| Findings and order | R.S. 22:1969(A) | After the answer, or if none arrives within 20 days, the commissioner reduces findings to writing and issues a cease-and-desist order |
| Penalty: ordinary | R.S. 22:1969(A)(1) | Up to $1,000 per act, not exceeding $100,000 aggregate |
| Penalty: knew or should have known | R.S. 22:1969(A)(1) | Up to $25,000 per act, not exceeding $500,000 aggregate in any six-month period |
| License action | R.S. 22:1969(A)(2) | Suspension or revocation if the person knew or should have known of the violation |
| Violating a cease-and-desist order | R.S. 22:1970 | Up to $25,000 per act, not exceeding $250,000 aggregate, and/or suspension or revocation |
| Review | R.S. 22:1969(B), 22:1970(B) | Aggrieved party may demand a hearing under R.S. 22:2191 et seq. |
Exam Scenarios
Scenario 1: The forged proof of loss
To close a file quickly, an adjuster signs an insured's name to a sworn proof of loss. That is forgery of a name on a document related to an insurance transaction under ground (10). It likely also violates the standards of conduct on honesty and truthful reporting. The commissioner may revoke the license and fine the adjuster, and the conduct may be referred for criminal investigation under Louisiana's insurance fraud law.
Scenario 2: The abandoned assignments
An independent adjuster accepts forty catastrophe assignments, inspects twelve and never reports on the rest. Ground (18) addresses exactly this: failure to complete an assignment thoroughly and timely, including reporting to the party that assigned the claim.
Scenario 3: A knowing pattern
An insurer knowingly fails, as a general business practice, to provide claim forms within 15 days of requests. After findings under R.S. 22:1969, the commissioner may impose up to $25,000 per violation, capped at $500,000 in any six-month period. The commissioner may also suspend or revoke the insurer's certificate of authority.
Absent a separate statute authorizing a greater penalty, what is the maximum licensing fine the commissioner may levy against a claims adjuster under R.S. 22:1672(A)?
Which event is a listed ground for disciplining a Louisiana claims adjuster license under R.S. 22:1672(A)?
After a hearing, the commissioner finds that an insurer committed unfair trade practices it knew or should have known violated the law. What monetary penalty does R.S. 22:1969 allow?
The commissioner refuses to renew an adjuster’s license. What recourse does the licensee have under R.S. 22:1672(B)?