Opinion Number ( 2004 )

Dear Mr. LeBlanc:

You question whether or not an insurance provider, CONSECO, may continue to participate in payroll deduction if it has recently lost its rating as required by statute. In short, we believe that the provider may no longer sell new products for the remainder of this fiscal year and would not be eligible to participate in payroll deduction in the next fiscal year if its rating does not improve.

The law requires that a insurance provider, in order to be eligible for payroll deduction, have a current rating in A.M. Best of B+ or better.¹ CONSECO recently lost its rating and it is unlikely that it will regain the rating prior to the new fiscal period.

We believe that the law is clear on this issue. An insurance provider, to be eligible in payroll deduction, must have a rating of B+ or better. Otherwise, it may not participate. We recommend that CONSECO not be allowed to sell new products for the remainder of this fiscal year. After July 1, 2004, if it cannot regain an appropriate rating, it will not be eligible to participate. We further recommend that notice be given immediately to all employees who are insured by CONSECO so that they may take appropriate action, i.e. continue coverage on their own or find another eligible provider.

We trust that this responds to your request. If you have any questions or comments please contact our office. With kindest regards,

Yours very truly,

CHARLES C. FOTI, JR. Attorney General

BY: ________________________________ TINA VICARI GRANT Assistant Attorney General

CCF, jr./TVG/dam

Date Received:

Date Released: May 7, 2004

¹ La.R.S. 42:455