Opinion Number ( 1999 )

Dear Mr. Benoit:

We received your request regarding life insurance for participants in the State Employees Group Benefits Program. Specifically, we provide you with our opinion on the following issue:

What is the maximum term for a contract between the Board of Trustees State Employees Group Benefits Program and an insurer to provide life insurance for participants in the State Employees Group Benefits Program?

The Louisiana Procurement Code, found at La. R.S. 39:1551, et seq, applies to every expenditure of public funds by the state acting through a governmental body under any contract for supplies, services, or major repairs. A governmental body, as defined in La. R.S. 39: 1556, includes any board of the executive or judicial branches of state government. La. R.S. 39:1556 further defines supplies as all property including insurance. Thus, it appears that The Board of Trustees for the State Employees Group Benefits Program is a "governmental body" and insurance is a "supply" as defined in the statute.

The Procurement Code addresses multi-year contracts in Section 1615(A). This section provides as follows:

Unless otherwise provided by law, a contract for supplies or services may be entered into for periods of not more than three years, if funds for the first fiscal year of the contemplated contract are available at the time of contracting. . . . (emphasis added)

However, La. R.S. 42:821(4)(b) which pertains to group life insurance provides, "No future such contract shall be for a longer period of time than two years." It thus appears that La. R.S.42:821(4)(b) is the "otherwise provided by law" referred to in Section 1615(A).

Accordingly, it is our opinion that the maximum term for a contract of life insurance for participants in the State Employees Group Benefits Program is two years.

We trust that this answers your request. If you need further assistance, please do not hesitate to contact our office.

Yours very truly,

RICHARD P. IEYOUB ATTORNEY GENERAL

BY: TINA VICARI GRANT Assistant Attorney General

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