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Louisiana Revised Statutes Tit. 22, § 761. Unearned premium reserve

Current as of January 01, 2023 | Updated by Findlaw Staff

A. With reference to insurance against loss or damage to property, except as provided in R.S. 22:763, and with reference to all general casualty insurance, health and accident insurance except as provided in R.S. 22:764, and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force.

B. (1) The commissioner of insurance may require that such reserve shall be equal to the unearned portions of the gross premiums in force after deducting authorized reinsurance, as computed on each respective risk, from the policy's date of issue.

(2) If the commissioner of insurance does not so require, then the unearned portions of the gross premiums in force, less authorized reinsurance which shall be held as a premium reserve, shall be computed according to the following table.

Term for Which Policy Was Written

Reserve for Unearned Premium

One year, or less

1/2

Two years:

First year

3/4

Second year

1/4

Three years:

First year

5/6

Second year

1/2

Third year

1/6

Four years:

First year

7/8

Second year

5/8

Third year

3/8

Fourth year

1/8

Five years:

First year

9/10

Second year

7/10

Third year

1/2

Fourth year

3/10

Fifth year

1/10

Over five years

Pro rata

(3) In lieu of computation according to such table, all of such reserves may be computed, at the insurer's option, on a monthly pro rata basis.

(4) After adopting any one of the methods for computing such reserve, an insurer shall not change methods without the commissioner of insurance's approval.

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Cite this article: FindLaw.com - Louisiana Revised Statutes Tit. 22, § 761. Unearned premium reserve - last updated January 01, 2023 | https://codes.findlaw.com/la/revised-statutes/la-rev-stat-tit-22-sect-761/

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