Bill Text: IN HB1226 | 2012 | Regular Session | Enrolled
Bill Title: Insurance matters.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Enrolled - Dead) 2012-03-15 - Signed by the Governor [HB1226 Detail]
Download: Indiana-2012-HB1226-Enrolled.html
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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AN ACT to amend the Indiana Code concerning insurance.
(1) "Acceptable collateral" means, as to over-the-counter derivatives transactions and for the purpose of calculating counterparty exposure amounts:
(A) cash;
(B) cash equivalents;
(C) letters of credit; and
(D) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(2) "Admitted assets" means the life insurance company's assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner.
(3) "Business entity" means:
(A) a sole proprietorship;
(B) a corporation;
(C) a limited liability company;
(D) an association;
(E) a partnership;
(F) a joint stock company;
(G) a joint venture;
(H) a mutual fund;
(I) a trust;
(J) a joint tenancy; or
(K) another, similar form of business organization;
whether organized for-profit or not-for-profit.
(4) "Cap" means an agreement obligating the seller to make payments to the buyer, with each payment based on the amount by which a reference price or level or the performance or value of one (1) or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price.
(5) "Cash" means any of the following:
(A) United States denominated paper currency and coins.
(B) Negotiable money orders and checks.
(C) Funds held in any time or demand deposit in any depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
(6) "Cash equivalent" means any of the following:
(A) A certificate of deposit issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
(B) A banker's acceptance issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
(C) A government money market mutual fund.
(D) A class one money market mutual fund.
(7) "Class one money market mutual fund" means a money market mutual fund that at all times qualifies for investment pursuant to the "Purposes and Procedures of the Securities Valuation Office" or any successor publication either using the bond class one reserve factor or because it is exempt from asset valuation reserve requirements.
(8) "Collar" means two (2) derivatives transactions on the same underlying interest in which the insurer receives payments as the buyer of an option, cap, or floor in one (1) transaction and makes payments as the seller of a different option, cap, or floor in the second transaction.
(9) A. "Counterparty exposure amount" means the net amount of credit risk attributable to a derivative instrument that a life
insurance company enters into with another business entity other
than through a qualified exchange or a qualified foreign
exchange, or cleared through a qualified clearing house ("over the
counter derivative instrument"). The amount of credit risk equals:
(1) the market value of the over-the-counter derivative
instrument, if the liquidation of the instrument would result in
a final cash payment to the insurer; or
(2) zero (0), if the liquidation of the over-the-counter
derivative instrument would not result in a final cash payment
to the insurer.
B. If a life insurance company enters into one (1) or more
over-the-counter derivative instruments with another business
entity under a written master agreement that provides for netting
of payments owed by the respective parties, and the domiciliary
jurisdiction of the counterparty is either within the United States
or a foreign jurisdiction listed in the "Purposes and Procedures of
the Securities Valuation Office" or any successor publication as
eligible for netting, the net amount of credit risk attributable to the
counterparty is the greater of zero (0) or the remainder of:
(1) the market value of the over-the-counter derivative
instruments entered into under the agreement, the liquidation
of which would result in a final cash payment to the insurer by
the business entity; minus
(2) the market value of the over-the-counter derivative
instruments entered into under the agreement, the liquidation
of which would result in a final cash payment by the insurer to
the business entity.
C. For open transactions involving over-the-counter derivative
instruments, market value:
(1) shall be determined not less frequently than at the end of
the most recent quarter of the insurer's fiscal year; and
(2) shall be reduced by the market value of acceptable
collateral that is:
(A) held by the insurer; or
(B) placed in escrow by one (1) or both parties.
(10) "Covered" means, in the case of a call option, that:
(A) the life insurance company owns the instrument
underlying the call option it has written (a "written call")
during the entire period that the written call is outstanding; or
(B) pursuant to the exercise of options, warrants, or conversion
rights already owned when the call option is written and held
during the period that the written call is outstanding, the life
insurance company can immediately acquire the instrument
underlying the written call, if:
(1) the price at which the underlying instrument can be
acquired is less than or equal to the strike price of the
written call; or
(2) the life insurance company has placed in escrow or,
pursuant to a custodian agreement, has segregated during
the entire period that the written call is outstanding, cash,
cash equivalents, or securities with a market value equal to
the difference between the price at which the underlying
instrument can be acquired and the strike price of the written
call.
(11) "Covered" means, in the case of a put option, that the life
insurance company has placed in escrow or, pursuant to a
custodian agreement, has segregated during the entire period that
the put option it has sold (a "written put") is outstanding, cash,
cash equivalents, or securities with a market value equal to the
amount of the insurer's obligation under the written put.
(12) "Covered" means, in the case of a cap or floor, that the life
insurance company holds in its portfolio, during the entire period
that the cap or floor is outstanding, investments that generate
sufficient cash flow to make all required payments under the cap
or floor.
(13) "Derivative instrument" means an agreement (in the nature
of a bilateral contract, option, or otherwise), an instrument, or a
series or combination of agreements and instruments:
(A) to make or take delivery of, or assume or relinquish, a
specified amount of one (1) or more of the interests underlying
the derivative instrument, or to make a cash settlement in lieu
thereof; or
(B) that has a price, performance, value, or cash flow based
primarily upon the actual or expected price, level,
performance, value, or cash flow of one (1) or more of the
interests underlying the derivative instrument.
Derivative instruments include options, warrants used in a
hedging transaction and not attached to another financial
instrument, caps, floors, collars, swaps, swaptions, forwards,
futures, and any other agreements (in the nature of bilateral
contracts, options, or otherwise) or substantially similar
instruments, or any series or combination thereof, and any
agreements (in the nature of bilateral contracts, options, or
otherwise) or instruments permitted under rules adopted by the
department.
(14) "Derivative transaction" means a transaction involving the
use of one (1) or more derivative instruments. For purposes of this
section, a derivative transaction may involve a requirement that
the insurer, a counterparty, or both, are required to post collateral
with the other party (or a designated third party) pursuant to an
agreement between the insurer and the counterparty.
(15) "Domestic jurisdiction" means the United States, any state,
territory, or possession of the United States, the District of
Columbia, Canada, or any province of Canada.
(16) "Floor" means an agreement obligating the seller to make
payments to the buyer, with each payment based on the amount
by which a predetermined number, sometimes called the floor rate
or price, exceeds a reference price or level or the performance or
value of one or more underlying interests.
(17) "Foreign currency" means a currency other than that of a
domestic jurisdiction.
(18) "Foreign jurisdiction" means a jurisdiction other than a
domestic jurisdiction.
(19) "Forward" means an agreement (other than a future) to make
or take delivery of, or effect a cash settlement based on the actual
or expected price, level, performance, or value of, one (1) or more
underlying interests.
(20) "Future" means an agreement, traded on a qualified exchange
or qualified foreign exchange, to make or take delivery of, or
effect a cash settlement based on the actual or expected price,
level, performance, or value of, one or more underlying interests.
(21) "Government money market mutual fund" means a money
market mutual fund that at all times:
(A) invests only in obligations issued, guaranteed, or insured
by the United States or collateralized repurchase agreements
composed of these obligations; and
(B) qualifies for investment without a reserve pursuant to the
"Purposes and Procedures of the Securities Valuation Office"
or any successor publication.
(22) "Guaranteed or insured," when used in connection with an
obligation acquired under this section, means that the guarantor
or insurer has agreed to:
(A) perform or insure the obligation of the obligor or purchase
the obligation; or
(B) be unconditionally obligated until the obligation is repaid
to maintain in the obligor a minimum net worth, fixed charge
coverage, stockholders' equity, or sufficient liquidity to enable
the obligor to pay the obligation in full.
(23) "Hedging transaction" means a derivative transaction that is
entered into and maintained to manage:
(A) the risk of a change in the value, yield, price, cash flow, or
quantity of assets or liabilities (or a portfolio of assets,
liabilities, or assets and liabilities) that the insurer has
acquired or incurred or anticipates acquiring or incurring; or
(B) currency exchange rate risk or the degree of exposure to
assets or liabilities (or a portfolio of assets, liabilities, or assets
and liabilities) that the insurer has acquired or incurred or
anticipates acquiring or incurring.
(24) "Income generation transaction" means a derivative
transaction involving the writing of covered call options, covered
put options, covered caps, or covered floors.
(25) "Investment company" means an investment company as
defined in Section 3(a) of the Investment Company Act of 1940
(15 U.S.C. 80a-1 et seq.), as amended, and a person described in
Section 3(c) of the Investment Company Act of 1940.
(26) "Investment company series" means an investment portfolio
of an investment company that is organized as a series company
and to which assets of the investment company have been
specifically allocated.
(27) "Letter of credit" means a clean, irrevocable, and
unconditional letter of credit issued or confirmed by, and payable
and presentable at, a financial institution on the list of financial
institutions meeting the standards for issuing letters of credit
under the "Purposes and Procedures of the Securities Valuation
Office" or any successor publication.
(28) "Market value" means:
(A) as to cash, cash equivalents, and letters of credit, the
amounts thereof;
(B) as to a security (other than a security that is an
over-the-counter derivative instrument) as of any date, the
price for the security on that date obtained from a generally
recognized source or the most recent quotation from such a
source or, to the extent no generally recognized source exists,
the price for the security as determined in good faith by the
parties to a transaction, plus accrued but unpaid income on the
security to the extent not included in the price as of that date;
and
(C) as to an over-the-counter derivative instrument as of any
date, the amount that a life insurance company would have to
pay or would receive for entering into an over-the-counter
derivative transaction on substantially identical terms with
another counterparty.
(29) "Money market mutual fund" means a mutual fund that
meets the conditions of 17 CFR 270.2a-7, under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
(30) "Mutual fund" means:
(A) an investment company; or
(B) in the case of an investment company that is organized as
a series company, an investment company series;
that is registered with the United States Securities and Exchange
Commission under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.).
(31) "Obligation" means any of the following:
(A) A bond.
(B) A note.
(C) A debenture.
(D) Any other form of evidence of debt.
(32) "Option" means an agreement giving the buyer the right to
buy or receive (a "call option"), sell or deliver (a "put option"),
enter into, extend or terminate, or effect a cash settlement based
on the actual or expected price, level, performance, or value of
one or more underlying interests.
(33) "Qualified business entity" means a business entity that is:
(A) an issuer of obligations, preferred stock, or derivative
instruments that are rated 1 or 2 or are rated the equivalent of
1 or 2 by the Securities Valuation Office or by a nationally
recognized statistical rating organization recognized by the
Securities Valuation Office; or
(B) a primary dealer in United States government securities,
recognized by the Federal Reserve Bank of New York.
(34) "Qualified clearinghouse" means a clearinghouse:
(A) that is for, and subject to the rules of, a qualified exchange
or qualified foreign exchange; and
(B) that provides clearing services, including acting as a
counterparty to each of the parties to a transaction so that the
parties no longer have credit risk as to each other.
(35) "Qualified exchange" means:
(A) a securities exchange registered as a national securities
exchange, or a securities market regulated under the Securities
Exchange Act of 1934 (15 U.S.C. 78 et seq.), as amended;
(B) a board of trade or commodities exchange designated as a contract market by the Commodity Futures Trading Commission (CFTC) or any successor of the CFTC;
(C) Private Offerings, Resales, and Trading through Automated Linkages (PORTAL);
(D) a designated offshore securities market as defined in Securities Exchange Commission Regulation S (17 C.F.R. Part 230), as amended; or
(E) a qualified foreign exchange.
(36) "Qualified foreign exchange" means a foreign exchange, board of trade, or contract market located outside the United States or its territories or possessions:
(A) that has received regulatory comparability relief under CFTC Rule 30.10 (as set forth in Appendix C to Part 30 of the CFTC's Regulations (17 C.F.R. Part 30));
(B) that is, or whose members are, subject to the jurisdiction of a foreign futures authority that has received regulatory comparability relief under CFTC Rule 30.10 (as set forth in Appendix C to Part 30 of the CFTC's Regulations (17 C.F.R. Part 30)) as to futures transactions in the jurisdiction where the exchange, board of trade, or contract market is located; or
(C) upon which are listed foreign stock index futures contracts that are the subject of no-action relief issued by the CFTC's Office of the General Counsel, provided that an exchange, board of trade, or contract market that qualifies as a qualified foreign exchange only under this clause is a qualified foreign exchange only as to foreign stock index futures contracts that are the subject of no-action relief.
(37) "Replication transaction" means a derivative transaction that is intended to replicate the investment in one (1) or more assets that an insurer is authorized to acquire or sell under this section or section 2 of this chapter. A derivative transaction that is entered into as a hedging transaction shall not be considered a replication transaction.
(38) "Securities Valuation Office" refers to:
(A) the Securities Valuation Office of the National Association of Insurance Commissioners; or
(B) any successor of the office referred to in Clause (A) established by the National Association of Insurance Commissioners.
(39) "Swap" means an agreement to exchange or to net payments at one (1) or more times based on the actual or expected price,
level, performance, or value of one (1) or more underlying
interests.
(40) "Swaption" means an agreement giving the buyer the right
(but not the obligation) to enter into a swap at a specified time in
the future.
(41) "Underlying interest" means the assets, liabilities, other
interests or a combination thereof underlying a derivative
instrument, such as any one (1) or more securities, currencies,
rates, indices, commodities, or derivative instruments.
(42) "Warrant" means an instrument that gives the holder the right
to purchase an underlying financial instrument at a given price
and time or at a series of prices and times outlined in the warrant
agreement. Warrants may be issued alone or in connection with
the sale of other securities, for example, as part of a merger or
recapitalization agreement or to facilitate divestiture of the
securities of another business entity.
(b) Before A life insurance company engages in derivatives
transactions, the insurer's company's board of directors must: shall do
all the following:
(1) adopt Before engaging in derivatives transactions, approve
a written plan that specifies guidelines, systems, and objectives to
be followed, such as:
(A) investment or, if applicable, underwriting objectives and
risk constraints, such as credit risk limits;
(B) permissible transactions and the relationship of those
transactions to the insurer's operations;
(C) internal control procedures;
(D) a system for determining whether a derivative instrument
used for hedging has been effective;
(E) a credit risk management system for over-the-counter
derivative derivatives transactions that measures credit risk
exposure using the counterparty exposure amount; and
(F) a mechanism for reviewing and auditing compliance with
the guidelines, systems, and objectives specified in the written
plan. and
(2) Before engaging in derivatives transactions, make a
determination that the insurer's investment managers have
adequate professional personnel, technical expertise, and systems
to implement the insurer's intended investment practices
involving derivative instruments.
(3) Review whether derivatives transactions have been made
in accordance with the approved guidelines and are consistent
with stated objectives.
(4) Take action to correct any deficiencies in internal controls
relating to derivatives transactions.
(c) A life insurance company may use derivative instruments under
this section to engage in hedging transactions, certain income
generation transactions, and certain replication transactions, as these
terms may be further defined in rules adopted by the department. For
each hedging and replication transaction in which it engages, a life
insurance company must be able to demonstrate to the commissioner:
(1) the intended characteristics; and
(2) the ongoing effectiveness;
of the derivative transaction or combination of the derivatives
transactions through appropriate analyses.
(d) A life insurance company insurer may enter into a hedging
transaction under this section if, as a result of the transaction, and after
giving effect to the transaction:
(1) the aggregate statement value of options, caps, floors, and
warrants not attached to another financial instrument purchased
and used in hedging transactions does not exceed seven and one
half percent (7.5%) of the insurer's admitted assets;
(2) the aggregate statement value of options, caps, and floors
written in hedging transactions does not exceed three percent
(3%) of the insurer's admitted assets; and
(3) the aggregate potential exposure of collars, swaps, forwards,
and futures used in hedging transactions does not exceed six and
one-half percent (6.5%) of the insurer's admitted assets.
(e) A life insurance company may enter into the following types of
income generation transactions:
(1) sales of covered call options on:
(A) non-callable fixed income securities;
(B) callable fixed income securities if the option expires by its
terms before the end of the noncallable period; or
(C) derivative instruments based on fixed income securities or
yields;
(2) sales of covered call options on equity securities;
(3) sales of covered puts on investments that the insurer is
permitted to acquire under section 2 of this chapter; and
(4) sales of covered caps or floors;
only if, as a result of the transactions and after giving effect to the
transactions, the aggregate statement value of the fixed income
securities that are subject to call or that generate the cash flows for
payments under the caps or floors, plus the face value of fixed income
securities underlying a derivative instrument subject to call, plus the
amount of the purchase obligations under the puts, does not exceed ten
percent (10%) of the insurer's admitted assets.
(f) A life insurance company may enter into replication transactions.
For the purposes of this subsection, a replication transaction is subject
to the limitations and restrictions set forth in section 2 of this chapter
to which the replicated investments are subject.
(g) An investment of a life insurance company that is:
(1) permitted under section 2(b)(17A) or 2(b)(17B) of this
chapter; and
(2) denominated in a foreign currency;
shall not be considered denominated in a foreign currency if the
acquiring insurer enters into one (1) or more contracts permitted under
this section in which the business entity counterparty agrees to
exchange, or grants to the insurer the option to exchange, all payments
made on the foreign currency denominated investment (or amounts
equivalent to the payments that are or will be due to the insurer in
accordance with the terms of such investment) for United States or
Canadian dollars during the period that the contract or contracts are in
effect, or other contracts with like effect, to insulate the insurer against
loss caused by diminution of the value of payments owed to the insurer
due to future changes in currency exchange rates.
(h) A life insurance company shall include all counterparty exposure
amounts in determining compliance with the limitations set forth in
section 2(b)(21) of this chapter.
(i) Upon the request of a life insurance company, the commissioner
may approve additional transactions involving the use of derivative
instruments that:
(1) exceed the limits set forth in subsections (d), (e), and (f); or
(2) are for other risk management purposes.
(j) A life insurance company shall maintain documentation and
records relating to each derivative transaction. The documentation and
records must record and include matters such as the following:
(1) The purpose or purposes of the transaction.
(2) The assets or liabilities to which the transaction relates.
(3) The specific derivative instrument used in the transaction.
(4) For collateralized derivatives transactions, a description of any
collateral posted by the insurer or the counterparty, as well as
records documenting any subsequent variations in the amount of
the collateral.
(5) For over-the-counter derivative transactions, the name of the
counterparty and the counterparty exposure amount.
(6) For exchange traded derivative instruments, the name of the exchange and the name of the firm that handled the trade.
(k) Each derivative instrument shall be:
(1) traded on a qualified exchange;
(2) entered into with, or guaranteed by, a business entity;
(3) issued or written by or entered into with the issuer of the underlying interest on which the derivative instrument is based; or
(4) entered into on a qualified foreign exchange.
(b) If the department in the course of the year ascertains that the net reserve value of a company's policies (as defined in section 9 of this chapter) or its reserve liabilities (as defined in section 10 of this chapter) exceeds such company's deposits as required by subsection (a), it may require such company within sixty (60) days to increase its
deposit to the required amount.
(c) Nothing in this article shall prevent the deposit of bonds,
mortgages, or other securities which meet the investment requirements
of a foreign or alien state or country, to an amount not exceeding the
amount of the reserves on policies issued to residents of, and to
corporations doing business in, such state or country. If, pursuant to the
law of a foreign or alien state or country in which an Indiana life
insurance company is doing business, securities belonging to such a
company are required to be deposited within the boundaries of such
foreign or alien state or country, credit for the amount of such deposit,
not exceeding the amount of the reserves on policies issued to residents
of, and to corporations doing business in, such foreign or alien state or
country, may be taken by the company as an offset against its deposits
required under this article.
(d) If, pursuant to the law of a foreign or alien state or country, a life
insurance company domiciled therein is not permitted a reserve credit
for reserves maintained by a reinsurer foreign to such a state or
country, except on the condition that the amount of such reserve be
deposited with the insurance supervisory official of such state or
country, a deposit credit for the amount of such reserves so deposited
shall be allowed a domestic life insurance company accepting
reinsurance from companies domiciled in such state or country.
(e) Any deposit of assets with the department pursuant to any law
superseded by this chapter shall, prior to the first deposit date
contemplated in subsection (a), be continued with the department and
otherwise be subject to this section.
(f) The amount of the deposit, except as otherwise provided in
subsection (a), shall be one million dollars ($1,000,000) excluding
policy loans and bank deposits, or such greater amount as the
department deems necessary to protect the interests of the
policyholders of a particular company by an order to the company to
deposit additional amounts under this section.
(g) Except for a company that maintains a deposit in the amount
specified in subsection (f), each company:
(1) must report to the department each new asset acquisition to
establish its eligibility for investment under the numbered
categories of permissible investments under section 2 of this
chapter at such regular intervals, within the time limit following
each interval and on the forms as the department may require,
without complying with IC 4-22-2; and
(2) when ordered by the department, shall make any additional
report relating to:
(A) the category of eligibility, the characteristics, or the amount of any investment; or
(B) the amount of the assets of the company in any category;
calculated under the rules applied for annual statement purposes.
(1) "Acceptable collateral" means the following:
(A) As to securities lending transactions and for the purpose of calculating counterparty exposure:
(i) cash;
(ii) cash equivalents;
(iii) letters of credit; and
(iv) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(B) As to lending foreign securities, sovereign debt rated 1 by the Securities Valuation Office.
(C) As to repurchase transactions:
(i) cash;
(ii) cash equivalents; and
(iii) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(D) As to reverse repurchase transactions:
(i) cash; and
(ii) cash equivalents.
(2) "Admitted assets" means assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner.
(3) "Business entity" means any of the following:
(A) A sole proprietorship.
(B) A corporation.
(C) A limited liability company.
(D) An association.
(E) A general partnership.
(F) A limited partnership.
(G) A limited liability partnership.
(H) A joint stock company.
(I) A joint venture.
(J) A trust.
(K) A joint tenancy.
(L) Any other similar form of business organization, whether for profit or nonprofit.
(4) "Cash" means any of the following:
(A) United States denominated paper currency and coins.
(B) Negotiable money orders and checks.
(C) Funds held in any time or demand deposit in any depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
(5) "Cash equivalent" means any of the following:
(A) A certificate of deposit issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
(B) A banker's acceptance issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
(C) A government money market mutual fund.
(D) A class one (1) money market mutual fund.
(6) "Class one (1) money market mutual fund" means a money market mutual fund that at all times qualifies for investment using the bond class one (1) reserve factor pursuant to the Purposes and Procedures of the Securities Valuation Office of the National Association of Insurance Commissioners or any successor publication.
(7) "Derivative transaction" has the meaning set forth in IC 27-1-12-2.2(a)(14).
(A) invests only in obligations issued, guaranteed, or insured by the United States or collateralized repurchase agreements composed of these obligations; and
(B) qualifies for investment without a reserve pursuant to the Purposes and Procedures of the Securities Valuation Office of the National Association of Insurance Commissioners or any successor publication.
(A) an investment company; or
(B) in the case of an investment company that is organized as a series company, an investment company series;
that is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
(A) A bond.
(B) A note.
(C) A debenture.
(D) Any other form of evidence of debt.
(A) an issuer of obligations or preferred stock that is rated one (1) or two (2) or is rated the equivalent of one (1) or two (2) by the Securities Valuation Office or by a nationally recognized statistical rating organization recognized by the Securities Valuation Office; or
(B) a primary dealer in United States government securities, recognized by the Federal Reserve Bank of New York.
(b) Any company, other than one organized as a life insurance company, organized under the provisions of IC 27-1 or any other law of this state and authorized to make any or all kinds of insurance described in class 2 or class 3 of IC 27-1-5-1 shall invest its capital or guaranty fund as follows and not otherwise:
(1) In cash.
(2) In:
(A) direct obligations of the United States; or
(B) obligations secured or guaranteed as to principal and interest by the United States.
(3) In:
(A) direct obligations; or
(B) obligations secured by the full faith and credit;
of any state of the United States or the District of Columbia.
(4) In obligations of any county, township, city, town, village, school district, or other municipal district within the United States which are a direct obligation of the county, township, city, town,
village, or district issuing the same.
(5) In obligations secured by mortgages or deeds of trust or
unencumbered real estate or perpetual leases thereon in the
United States not exceeding eighty percent (80%) of the fair value
of the security determined in a manner satisfactory to the
department, except that the percentage stated may be exceeded if
and to the extent such excess is guaranteed or insured by the
United States, any state, territory, or possession of the United
States, the District of Columbia, Canada, any province of Canada,
or by an administration, agency, authority, or instrumentality of
any such governmental units. Where improvements on the land
constitute a part of the value on which the loan is made, the
improvements shall be insured against fire and tornado for the
benefit of the mortgagee. For the purposes of this section, real
estate may not be deemed to be encumbered by reason of the
existence of taxes or assessments that are not delinquent,
instruments creating or reserving mineral, oil, or timber rights,
rights-of-way, joint driveways, sewer rights, rights-in-walls, nor
by reason of building restrictions, or other restrictive covenants,
nor when such real estate is subject to lease in whole or in part
whereby rents or profits are reserved to the owner. The
restrictions contained in this subdivision do not apply to loans or
investments made under section 5 of this chapter.
(c) Any company organized under the provisions of this article or
any other law of this state and authorized to make any or all of the
kinds of insurance described in class 2 or class 3 of IC 27-1-5-1 shall
invest its funds over and above its required capital stock or required
guaranty fund as follows, and not otherwise:
(1) In cash or cash equivalents. However, not more than ten
percent (10%) of admitted assets may be invested in any single
government money market mutual fund or class one (1) money
market mutual fund.
(2) In direct obligations of the United States or obligations
secured or guaranteed as to principal and interest by the United
States.
(3) In obligations issued, guaranteed, or insured as to principal
and interest by a city, county, drainage district, road district,
school district, tax district, town, township, village or other civil
administration, agency, authority, instrumentality or subdivision
of a state, territory, or possession of the United States, the District
of Columbia, Canada, or any province of Canada, providing such
obligations are authorized by law and are either:
(A) direct and general obligations of the issuing, guaranteeing, or insuring governmental unit, administration, agency, authority, district, subdivision, or instrumentality;
(B) payable from designated revenues pledged to the payment of the principal and interest of the obligations; or
(C) improvement bonds or other obligations constituting a first lien, except for tax liens, against all of the real estate within the improvement district or on that part of such real estate not discharged from such lien through payment of the assessment.
The area to which the improvement bonds or other obligations under clause (C) relate must be situated within the limits of a town or city and at least fifty percent (50%) of the properties within that area must be improved with business buildings or residences.
(4) In:
(A) direct obligations; or
(B) obligations secured by the full faith and credit;
of any state of the United States, the District of Columbia, or Canada or any province thereof.
(5) In obligations guaranteed, supported, or insured as to principal and interest by the United States, any state, territory, or possession of the United States, the District of Columbia, Canada, any province of Canada, or by an administration, agency, authority, or instrumentality of any of the political units listed in this subdivision. An obligation is "supported" for the purposes of this subdivision when repayment of the obligation is secured by real or personal property of value at least equal to the principal amount of the indebtedness by means of mortgage, assignment of vendor's interest in one (1) or more conditional sales contracts, other title retention device, or by means of other security interest in the property for the benefit of the holder of the obligation, and one (1) of the political units listed in this subdivision, or an administration, agency, authority, or instrumentality listed in this subdivision, has entered into a firm agreement to rent or use the property pursuant to which entity is obligated to pay money as rental or for the use of the property in amounts and at times that are sufficient, after provision for taxes upon and for other expenses of the use of the property, to repay in full the indebtedness, both principal and interest, and when the firm agreement and the money obligated to be paid under the agreement are assigned, pledged, or secured for the benefit of the holder of the obligation. However, where the security consists of
a first mortgage lien or deed of trust on a fee interest in real
property, the obligation may provide for the amortization, during
the initial fixed period of the lease or contract of less than one
hundred percent (100%) of the indebtedness if there is pledged or
assigned, as additional security for the obligation, sufficient
rentals payable under the lease, or of contract payments, to secure
the amortized obligation payments required during the initial,
fixed period of the lease or contract, including but not limited to
payments of principal, interest, and taxes other than the income
taxes of the borrower, and if there is to be left unamortized at the
end of the period an amount not greater than the original
appraised value of the land only, exclusive of all improvements,
as prescribed by law.
(6) In obligations secured by mortgages or deeds of trust or
unencumbered real estate or perpetual leases thereon, in any state
in the United States, the District of Columbia, Canada, or any
province of Canada, not exceeding eighty percent (80%) of the
fair value of the security determined in a manner satisfactory to
the department, except that the percentage stated may be
exceeded if and to the extent that the excess is guaranteed or
insured by the United States, any state, territory, or possession of
the United States, the District of Columbia, Canada, any province
of Canada, or by an administration, agency, authority, or
instrumentality of any of such governmental units. The value of
the real estate must be determined by a method and in a manner
satisfactory to the department. The restrictions contained in this
subdivision do not apply to loans or investments made under
section 5 of this chapter.
(7) In obligations issued under or pursuant to the Farm Credit Act
of 1971 (12 U.S.C. 2001 through 2279aa-14) as in effect on
December 31, 1990, or the Federal Home Loan Bank Act (12
U.S.C. 1421 through 1449) as in effect on December 31, 1990,
interest bearing obligations of the FSLIC Resolution Fund and
shares of any institution that is insured by the Federal Deposit
Insurance Corporation to the extent that the shares are insured,
obligations issued or guaranteed by the International Bank for
Reconstruction and Development, obligations issued or
guaranteed by the Inter-American Development Bank, and
obligations issued or guaranteed by the African Development
Bank.
(8) In any mutual fund that:
(A) has been registered with the Securities and Exchange
Commission for a period of at least five (5) years immediately
preceding the date of purchase;
(B) has net assets of at least twenty-five million dollars
($25,000,000) on the date of purchase; and
(C) invests substantially all of its assets in investments
permitted under this subsection.
The amount invested in any single mutual fund shall not exceed
ten percent (10%) of admitted assets. The aggregate amount of
investments under this subdivision may be limited by the
commissioner if the commissioner finds that investments under
this subdivision may render the operation of the company
hazardous to the company's policyholders, to the company's
creditors, or to the general public. This subdivision in no way
limits or restricts investments that are otherwise specifically
permitted under this section.
(9) In obligations payable in United States dollars and issued,
guaranteed, assumed, insured, or accepted by a foreign
government or by a solvent business entity existing under the laws
of a foreign government, if the obligations of the foreign
government or business entity meet at least one (1) of the
following criteria:
(A) The obligations carry a rating of at least A3 conferred by
Moody's Investor Services, Inc.
(B) The obligations carry a rating of at least A- conferred by
Standard & Poor's Corporation.
(C) The earnings available for fixed charges of the business
entity for a period of five (5) fiscal years preceding the date of
purchase have averaged at least three (3) times the average
fixed charges of the business entity applicable to the period,
and if during either of the last two (2) years of the period, the
earnings available for fixed charges were at least three (3)
times the fixed charges of the business entity for the year. As
used in this subdivision, the terms "earnings available for fixed
charges" and "fixed charges" have the meanings set forth in
IC 27-1-12-2(a).
Foreign investments authorized by this subdivision shall not
exceed twenty percent (20%) of the company's admitted assets.
This subdivision in no way limits or restricts investments that are
otherwise specifically permitted under this section. Canada is not
a foreign government for purposes of this subdivision.
(10) In the obligations of any solvent business entity existing
under the laws of the United States, any state of the United States,
the District of Columbia, Canada, or any province of Canada,
provided that interest on the obligations is not in default.
(11) In the preferred or guaranteed shares of any solvent business
entity, so long as the business entity is not and has not been for
the preceding five (5) years in default in the payment of interest
due and payable on its outstanding debt or in arrears in the
payment of dividends on any issue of its outstanding preferred or
guaranteed stock.
(12) In the shares, other than those specified in subdivision (7), of
any solvent business entity existing under the laws of any state of
the United States, the District of Columbia, Canada, or any
province of Canada, and in the shares of any institution wherever
located which has the insurance protection provided by the
Federal Deposit Insurance Corporation. Except for the purpose of
mutualization or for the purpose of retirement of outstanding
shares of capital stock pursuant to amendment of its articles of
incorporation, or in connection with a plan approved by the
commissioner for purchase of such shares by the insurance
company's officers, employees, or agents, or for the elimination
of fractional shares, no company subject to the provisions of this
section may invest in its own stock.
(13) In loans upon the pledge of any mortgage, stocks, bonds, or
other evidences of indebtedness, acceptable as investments under
the terms of this chapter, if the current value of the mortgage,
stock, bond, or other evidences of indebtedness is at least
twenty-five percent (25%) more than the amount loaned on it.
(14) In real estate, subject to subsections (d) and (e).
(15) In securities lending, repurchase, and reverse repurchase
transactions with business entities, subject to the following
requirements:
(A) The company's board of directors shall adopt a written
plan that specifies guidelines and objectives to be followed,
such as:
(i) a description of how cash received will be invested or
used for general corporate purposes of the company;
(ii) operational procedures to manage interest rate risk,
counterparty default risk, and the use of acceptable collateral
in a manner that reflects the liquidity needs of the
transaction; and
(iii) the extent to which the company may engage in these
transactions.
(B) The company shall enter into a written agreement for all
transactions authorized in this subdivision. The written
agreement shall require the termination of each transaction not
more than one (1) year from its inception or upon the earlier
demand of the company. The agreement shall be with the
counterparty business entity but, for securities lending
transactions, the agreement may be with an agent acting on
behalf of the company if the agent is a qualified business entity
and if the agreement:
(i) requires the agent to enter into separate agreements with
each counterparty that are consistent with the requirements
of this section; and
(ii) prohibits securities lending transactions under the
agreement with the agent or its affiliates.
(C) Cash received in a transaction under this section shall be
invested in accordance with this section and in a manner that
recognizes the liquidity needs of the transaction or used by the
company for its general corporate purposes. For as long as the
transaction remains outstanding, the company or its agent or
custodian shall maintain, as to acceptable collateral received
in a transaction under this section, either physically or through
book entry systems of the Federal Reserve, Depository Trust
Company, Participants Trust Company, or other securities
depositories approved by the commissioner:
(i) possession of the acceptable collateral;
(ii) a perfected security interest in the acceptable collateral;
or
(iii) in the case of a jurisdiction outside the United States,
title to, or rights of a secured creditor to, the acceptable
collateral.
(D) For purposes of calculations made to determine
compliance with this subdivision, no effect may be given to
the company's future obligation to resell securities in the case
of a repurchase transaction, or to repurchase securities in the
case of a reverse repurchase transaction. A company shall not
enter into a transaction under this subdivision if, as a result of
and after giving effect to the transaction:
(i) the aggregate amount of securities then loaned, sold to,
or purchased from any one (1) business entity pursuant to
this subdivision would exceed five percent (5%) of its
admitted assets (but, in calculating the amount sold to or
purchased from a business entity pursuant to repurchase or
reverse repurchase transactions, effect may be given to
netting provisions under a master written agreement); or
(ii) the aggregate amount of all securities then loaned, sold
to, or purchased from all business entities under this
subdivision would exceed forty percent (40%) of its
admitted assets.
(E) In a securities lending transaction, the company shall
receive acceptable collateral having a market value as of the
transaction date at least equal to one hundred two percent
(102%) of the market value of the securities loaned by the
company in the transaction as of that date. If at any time the
market value of the acceptable collateral is less than the
market value of the loaned securities, the business entity shall
be obligated to deliver additional acceptable collateral, the
market value of which, together with the market value of all
acceptable collateral then held in connection with the
transaction, at least equals one hundred two percent (102%) of
the market value of the loaned securities.
(F) In a reverse repurchase transaction, the company shall
receive acceptable collateral having a market value as of the
transaction date at least equal to ninety-five percent (95%) of
the market value of the securities transferred by the company
in the transaction as of that date. If at any time the market
value of the acceptable collateral is less than ninety-five
percent (95%) of the market value of the securities so
transferred, the business entity shall be obligated to deliver
additional acceptable collateral, the market value of which,
together with the market value of all acceptable collateral then
held in connection with the transaction, equals at least
ninety-five percent (95%) of the market value of the
transferred securities.
(G) In a repurchase transaction, the company shall receive as
acceptable collateral transferred securities having a market
value equal to at least one hundred two percent (102%) of the
purchase price paid by the company for the securities. If at any
time the market value of the acceptable collateral is less than
one hundred percent (100%) of the purchase price paid by the
company, the business entity shall be obligated to provide
additional acceptable collateral, the market value of which,
together with the market value of all acceptable collateral then
held in connection with the transaction, equals at least one
hundred two percent (102%) of the purchase price. Securities
acquired by a company in a repurchase transaction shall not be
sold in a reverse repurchase transaction, loaned in a securities
lending transaction, or otherwise pledged.
(16) In mortgage backed securities, including collateralized
mortgage obligations, mortgage pass through securities, mortgage
backed bonds, and real estate mortgage investment conduits,
adequately secured by a pool of mortgages, which mortgages are
fully guaranteed or insured by the government of the United
States or any agency of the United States, including the Federal
National Mortgage Association or the Federal Home Loan
Mortgage Corporation.
(17) In mortgage backed securities, including collateralized
mortgage obligations, mortgage pass through securities, mortgage
backed bonds, and real estate mortgage investment conduits,
adequately secured by a pool of mortgages, if the securities carry
a rating of at least:
(A) A3 conferred by Moody's Investor Services, Inc.; or
(B) A- conferred by Standard & Poor's Corporation.
The amount invested in any one (1) obligation or pool of
obligations described in this subdivision shall not exceed five
percent (5%) of admitted assets. The aggregate amount of all
investments under this subdivision shall not exceed ten percent
(10%) of admitted assets.
(18) Any other investment acquired in good faith as payment on
account of existing indebtedness or in connection with the
refinancing, restructuring, or workout of existing indebtedness, if
taken to protect the interests of the company in that investment.
(19) In obligations or interests in trusts or partnerships in which
a life insurance company may invest as described in paragraph 31
of IC 27-1-12-2(b). Investments authorized by this paragraph may
not exceed ten percent (10%) of the company's admitted assets.
(20) In any other investment. The total of all investments under
this subdivision, except for investments in subsidiary companies
under IC 27-1-23-2.6, may not exceed an aggregate amount of ten
percent (10%) of the insurer's admitted assets. Investments are not
permitted under this subdivision:
(A) if expressly prohibited by statute; or
(B) in an insolvent organization or an organization in default
with respect to the payment of principal or interest on its
obligations.
(d) Any company subject to the provisions of this section shall have
power to acquire, hold, or convey real estate, or an interest therein, as
described below, and no other:
(1) Leaseholds, provided the mortgage term shall not exceed four-fifths (4/5) of the unexpired lease term, including enforceable renewable options, remaining at the time of the loan, such real estate or leaseholds to be located in the United States, any territory or possession of the United States, or Canada, the value of such leasehold for statement purposes shall be determined in a manner and form satisfactory to the department. At the time the leasehold is acquired and approved by the department, a schedule of annual depreciation shall be set up by the department in which the value of said leasehold is to be depreciated, and said depreciation is to be averaged out over not exceeding a period of fifty (50) years.
(2) The building in which it has its principal office and the land on which it stands.
(3) Such as shall be necessary for the convenient transaction of its business.
(4) Such as shall have been acquired for the accommodation of its business.
(5) Such as shall have been mortgaged to it in good faith by way of security for loans previously contracted or for money due.
(6) Such as shall have been conveyed to it in connection with its investments in real estate contracts or its investments in real estate under lease or for the purpose of leasing or such as shall have been acquired for the purpose of investment under any law, order, or regulation authorizing such investment, for statement purposes, the value of such real estate shall be determined in a manner satisfactory to the department.
(7) Such as shall have been conveyed to it in satisfaction of debts previously contracted in the course of its dealings, or in exchange for real estate so conveyed to it.
(8) Such as it shall have purchased at sales on judgments, decrees, or mortgages obtained or made for such debts.
(e) All real estate described in subsection (d)(4) through (d)(8) which is not necessary for the convenient transaction of its business shall be sold by said company and disposed of within ten (10) years after it acquired title to the same, or within five (5) years after the same has ceased to be necessary for the accommodation of its business, unless the company procures the certificate of the commissioner that its interests will suffer materially by a forced sale of the real estate, in which event the time for the sale may be extended to such time as the commissioner directs in the certificate.
(f) The board of directors of a company, other than a company
organized as a life insurance company, shall do all the following:
(1) Before engaging in derivatives transactions, approve a
written plan that specifies guidelines, systems, and objectives
to be followed, such as:
(A) investment of or, if applicable, underwriting objectives
and risk constraints, such as credit risk limits;
(B) permissible transactions and the relationship of those
transactions to the insurer's operations;
(C) internal control procedures;
(D) a system for determining whether a derivative
instrument used for hedging has been effective;
(E) a credit risk management system for over-the-counter
derivatives transactions that measures credit risk exposure
using the counterparty exposure amount; and
(F) a mechanism for reviewing and auditing compliance
with the guidelines, systems, and objectives specified in the
written plan.
(2) Before engaging in derivatives transactions, make a
determination that the insurer's investment managers have
adequate professional personnel, technical expertise, and
systems to implement the insurer's intended investment
practices involving derivative instruments.
(3) Review whether derivatives transactions have been made
in accordance with the approved guidelines and are consistent
with stated objectives.
(4) Take action to correct any deficiencies in internal controls
relating to derivatives transactions.
(b) Except as provided in subsection (c), to renew a license issued under IC 27-1-15.6, a limited lines producer with a title qualification under IC 27-1-15.6-7(a)(8) must complete at least seven (7) hours of credit in continuing education courses related to the business of title
insurance with at least one (1) hour of instruction in a structured setting
or comparable self-study in each of the following:
(1) Ethical practices in the marketing and selling of title
insurance.
(2) Title insurance underwriting.
(3) Escrow issues.
(4) Principles of the federal Real Estate Settlement Procedures
Act (12 U.S.C. 2608).
An attorney in good standing who is admitted to the practice of law in
Indiana and holds a license issued under IC 27-1-15.6 with a title
qualification under IC 27-1-15.6-7(a)(8) may complete all or any
number of hours of continuing education required by this subsection by
completing an equivalent number of hours in continuing legal
education courses related to the business of title insurance or any
aspect of real property law.
(c) The following insurance producers are not required to complete
continuing education courses to renew a license under this chapter:
(1) A limited lines producer who is licensed without examination
under IC 27-1-15.6-18(1) or IC 27-1-15.6-18(2).
(2) A limited line credit insurance producer.
(3) A nonresident limited lines producer with a title qualification:
(A) whose home state requires continuing education for a title
qualification; and
(B) who has met the continuing education requirements
described in clause (A).
(d) To satisfy the requirements of subsection (a) or (b), a licensee
may use only those credit hours earned in continuing education courses
completed by the licensee:
(1) after the effective date of the licensee's last renewal of a
license under this chapter; or
(2) if the licensee is renewing a license for the first time, after the
date on which the licensee was issued the license under this
chapter.
(e) If an insurance producer receives qualification for a license in
more than one (1) line of authority under IC 27-1-15.6, the insurance
producer may not be required to complete a total of more than
twenty-four (24) hours of credit in continuing education courses to
renew the license.
(f) Except as provided in subsection (g), a licensee may receive
credit only for completing continuing education courses that have been
approved by the commissioner under section 4 of this chapter.
(g) A licensee who teaches a course approved by the commissioner
under section 4 of this chapter shall receive continuing education credit
for teaching the course.
(h) When a licensee renews a license issued under this chapter, the
licensee must submit:
(1) a continuing education statement that:
(A) is in a format authorized by the commissioner;
(B) is signed by the licensee under oath; and
(C) lists the continuing education courses completed by the
licensee to satisfy the continuing education requirements of
this section; and
(2) any other information required by the commissioner.
(i) A continuing education statement submitted under subsection (h)
may be reviewed and audited by the department.
(j) A licensee shall retain a copy of the original certificate of
completion received by the licensee for completion of a continuing
education course.
(k) A licensee who completes a continuing education course that:
(1) is approved by the commissioner under section 4 of this
chapter;
(2) is held in a classroom setting; and
(3) concerns ethics;
shall receive continuing education credit for the number of hours for
which the course is approved plus additional hours, not to exceed two
(2) four (4) hours in a renewal period. equal to the number of hours for
which the course is approved.
(b) To receive an extension under this section, a licensee must:
(1) file a request with the commissioner on a form provided by the commissioner; and
(2) submit with the request an extension fee of twenty-five dollars ($25) for deposit in the department of insurance fund under IC 27-1-3-28.
(c) After a licensee files a request for an extension, the license of the licensee remains in effect until the commissioner makes a decision on the request.
(d) If the commissioner denies a licensee's request for an extension, the licensee must complete continuing education requirements set forth in section 2 of this chapter within ninety (90) days after the commissioner notifies the licensee of the denial.
(1) Be conducted or developed by an:
(A) insurance trade association;
(B) accredited college or university;
(C) educational organization certified by the insurance producer education and continuing education advisory council; or
(D) insurance company licensed to do business in Indiana.
(2) Provide for self-study or instruction provided by an approved instructor in a structured setting, as follows:
(A) For life insurance producers, not less than twenty (20) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana; and
(iii) principles of life insurance.
(B) For health insurance producers, not less than twenty (20) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana; and
(iii) principles of health insurance.
(C) For life and health insurance producers, not less than forty (40) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana;
(iii) principles of life insurance; and
(iv) principles of health insurance.
(D) For property and casualty insurance producers, not less than forty (40) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana;
(iii) principles of property insurance; and
(iv) principles of liability insurance.
(E) For personal lines producers, a minimum of twenty (20) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana; and
(iii) principles of property and liability insurance applicable to coverages sold to individuals and families for primarily noncommercial purposes.
(F) For title insurance producers, not less than ten (10) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of title insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana;
(iii) principles of title insurance, including underwriting and escrow issues; and
(iv) principles of the federal Real Estate Settlement Procedures Act (12 U.S.C. 2608).
(G) For annuity product producers, not less than four (4) hours of instruction in a structured setting or comparable self-study on:
(i) types and classifications of annuities;
(ii) identification of the parties to an annuity;
(iii) the manner in which fixed, variable, and indexed annuity contract provisions affect consumers;
(iv) income taxation of qualified and non-qualified annuities;
(v) primary uses of annuities; and
(vi) appropriate sales practices, replacement, and disclosure requirements.
(3) Instruction provided in a structured setting must be provided only by individuals who meet the qualifications established by the commissioner under subsection (b).
(b) The commissioner, after consulting with the insurance producer education and continuing education advisory council, shall adopt rules under IC 4-22-2 prescribing the criteria that a person must meet to render instruction in a certified prelicensing course of study.
(c) The commissioner shall adopt rules under IC 4-22-2 prescribing the subject matter that an insurance producer program of study must cover to qualify for certification as a certified prelicensing course of study under this section.
(d) The commissioner may make recommendations that the commissioner considers necessary for improvements in course materials.
(e) The commissioner shall designate a program of study that meets the requirements of this section as a certified prelicensing course of study for purposes of IC 27-1-15.6-6.
(f) For each person that provides one (1) or more certified prelicensing courses of study, the commissioner shall annually determine, of all individuals who received classroom instruction in the certified prelicensing courses of study provided by the person, the percentage who passed the examination required by IC 27-1-15.6-5. The commissioner shall determine only one (1) passing percentage under this subsection for all lines of insurance described in IC 27-1-15.6-7(a) for which the person provides classroom instruction in certified prelicensing courses of study.
(1) Withdraw the certification of a course of study that does not maintain reasonable standards, as determined by the commissioner for the protection of the public.
(2) Disqualify a person that is currently qualified under subsection (b) to render instruction in a certified prelicensing course of study from rendering the instruction if the passing percentage calculated under subsection (f) is less than forty-five percent (45%).
department, under the oath of the president and secretary, the gross
amount of all premiums received by it on policies of insurance
covering risks within this state, or in the case of marine or
transportation risks, on policies made, written, or renewed within this
state during the twelve (12) month period ending on December 31 of
the preceding calendar year. From the amount of gross premiums
described in this subsection shall be deducted:
(1) considerations received for reinsurance of risks within this
state from companies authorized to transact an insurance business
in this state;
(2) the amount of dividends paid or credited to resident insureds,
or used to reduce current premiums of resident insureds;
(3) the amount of premiums actually returned to residents on
account of applications not accepted or on account of policies not
delivered; and
(4) the amount of unearned premiums returned on account of the
cancellation of policies covering risks within the state.
(b) A domestic company shall be taxed under this section only in
each calendar year with respect to which it files a notice of election.
The notice of election shall be filed with the insurance commissioner
and the commissioner of the department of state revenue on or before
November 30 in each year and shall state that the domestic company
elects to submit to the tax imposed by this section with respect to the
calendar year commencing January 1 next following the filing of the
notice. The exemption from license fees, privilege, or other taxes
accorded by this section to insurance companies not organized under
the laws of this state and doing business within this state which are
taxed under this chapter shall be applicable to each domestic company
in each calendar year with respect to which it is taxed under this
section. In each calendar year with respect to which a domestic
company has not elected to be taxed under this section it shall be taxed
without regard to this section.
(c) For the privilege of doing business in this state, every insurance
company required to file the report provided in this section shall pay
into the treasury of this state an amount equal to the excess, if any, of
the gross premiums over the allowable deductions multiplied by the
following rate for the year that the report covers:
(1) For 2000, two percent (2%).
(2) For 2001, one and nine-tenths percent (1.9%).
(3) For 2002, one and eight-tenths percent (1.8%).
(4) For 2003, one and seven-tenths percent (1.7%).
(5) For 2004, one and five-tenths percent (1.5%).
(d) Payments of the tax imposed by this section shall be made on a quarterly estimated basis. The amounts of the quarterly installments shall be computed on the basis of the total estimated tax liability for the current calendar year and the installments shall be due and payable on or before April 15, June 15, September 15, and December 15, of the current calendar year.
(e) Any balance due shall be paid in the next succeeding calendar year at the time designated for the filing of the annual report with the department.
(f) Any overpayment of the estimated tax during the preceding calendar year shall be allowed as a credit against the liability for the first installment of the current calendar year.
(g) In the event a company subject to taxation under this section fails to make any quarterly payment in an amount equal to at least:
(1) twenty-five percent (25%) of the total tax paid during the preceding calendar year; or
(2) twenty per cent (20%) of the actual tax for the current calendar year;
the company shall be liable, in addition to the amount due, for interest in the amount of one percent (1%) of the amount due and unpaid for each month or part of a month that the amount due, together with interest, remains unpaid. This interest penalty shall be exclusive of and in addition to any other fee, assessment, or charge made by the department.
(h) The taxes under this article shall be in lieu of all license fees or privilege or other tax levied or assessed by this state or by any municipality, county, or other political subdivision of this state. No municipality, county, or other political subdivision of this state shall impose any license fee or privilege or other tax upon any insurance company or any of its agents for the privilege of doing an insurance business therein, except the tax authorized by IC 22-12-6-5. However, the taxes authorized under IC 22-12-6-5 shall be credited against the taxes provided under this chapter. This section shall not be construed to prohibit the levy and collection of state, county, or municipal taxes upon real and tangible personal property of such company, or to prohibit the levy of any retaliatory tax, fine, penalty, or fee provided by law. However, all insurance companies, foreign or domestic, paying taxes in this state predicated in part on their premium income from policies sold and premiums received in Indiana, shall have the same rights and privileges from further taxation and shall be given the same credits wherever applicable, as those set out for those companies
paying only a tax on premiums as set out in this section.
(i) Any insurance company failing or refusing, for more than thirty
(30) days, to render an accurate account of its premium receipts as
provided in this section and pay the tax due thereon shall be subject to
a penalty of one hundred dollars ($100) for each additional day such
report and payment shall be delayed, not to exceed a maximum penalty
of ten thousand dollars ($10,000). The penalty may be ordered by the
commissioner after a hearing under IC 4-21.5-3. The commissioner
may revoke all authority of such defaulting company to do business
within this state, or suspend such authority during the period of such
default, in the discretion of the commissioner.
(1) is made by the department; and
(2) meets the requirements of subsection (b);
not more than twenty (20) business days after the date the written inquiry or request is received by the company.
(b) A written inquiry or request described in subsection (a) must do all of the following:
(1) Be addressed to the individual who holds the position that the company has designated as the position reasonably capable of processing such an inquiry or request.
(2) Specify that the inquiry or request is made under this section.
(3) Specify the penalty described in subsection (d) to which the company is subject for noncompliance with the inquiry or request.
(4) Numerically list the questions to which a response is requested.
(c) The commissioner may, upon request of a company for extenuating circumstances, grant a company an extension of the period specified in subsection (a) or waive all or any part of a civil penalty described in subsection (d).
(d) The commissioner may assess against a company that does not comply with subsection (a) a civil penalty of one hundred dollars ($100) per day of noncompliance. A civil penalty assessed under this subsection may not exceed three thousand dollars ($3,000).
(e) The commissioner shall deposit a civil penalty collected under this section in the department of insurance fund established
by IC 27-1-3-28.
(b) As used in this section, "health insurance plan" means any of the following:
(1) An individual policy of accident and sickness insurance (as defined in IC 27-8-5-1). However, the term does not include the coverages described in IC 27-8-5-2.5(a).
(2) An individual contract (as defined in IC 27-13-1-21).
(c) As used in this section, "insurer" is limited to a person that enters into, issues, or delivers a health insurance plan on an individual basis in Indiana.
(d) An insurer shall, at least one hundred eighty (180) days before withdrawing from the individual health insurance market in Indiana, provide to the department written notice of the insurer's intent to withdraw.
(b) The following types of insurance are exempt from the requirements of subsections (a) and
(1) Inland marine risks, which by general custom of the business are not written according to manual rates or rating plans.
(2) Insurance that is:
(A) written by an insurer that:
(i) complies with subsection
(ii) is approved for an exemption by the commissioner; and
(B) issued to commercial policyholders.
(c) Every such filing shall indicate the character and extent of the coverage contemplated and shall be accompanied by the information upon which the filer supports such filing.
(d) The information furnished in support of a filing may include:
(1) the experience and judgment of the insurer or rating organization making the filing;
(2) its interpretation of any statistical data it relies upon;
(3) the experience of other insurers or rating organizations; or
(4) any other relevant factors.
The commissioner shall have the right to request any additional relevant information.
(e) The following apply to a filing and any supporting information filed under this section:
(1) If the filer marks the filing or supporting information "confidential", "trade secret", or "proprietary", the filer shall, upon the request of the commissioner, provide a sufficient basis on which the commissioner may determine that the filing or supporting information is confidential.
(2) If the commissioner does not, less than thirty (30) days after receiving the filing or information, notify the filer that the commissioner disapproves the confidentiality of the filing or supporting information, the filing and supporting information is considered to have been determined to be confidential.
(3) The commissioner shall do the following:
(A) Upon the request of the filer before the filing or supporting information is open to public inspection:
(i) return the filing or supporting information to the filer; and
(ii) make a notation in the policy filing retained by the commissioner that the filing or supporting information was returned to the filer.
(B) If the commissioner determines that a filing or supporting information is not confidential under this subsection, upon the request of the filer before the filing or supporting information is open to public inspection, return the entire filing to the filer.
(C) Adopt rules under IC 4-22-2 to establish a process for a determination under this subsection that a filing or supporting information is confidential.
(4) Except for information determined by the commissioner to be confidential under this subsection, the filing and supporting information that has not been returned to the filer under subdivision (3) shall be open to public inspection as soon as stamped "filed" within a reasonable time after receipt by the commissioner, and copies may be obtained by any person on request and upon payment of a reasonable charge therefor.
The work product of the commissioner in making a determination
under this subsection is confidential. The department, the
commissioner, and employees of the department are immune from
civil and criminal liability for the good faith performance of their
duties under this subsection.
(e) (f) Filings shall become effective upon the date of filing by
delivery or upon date of mailing by registered mail to the
commissioner, or on a later date specified in the filing.
(f) (g) Specific inland marine rates on risks specially rated, made by
a rating organization, shall be filed with the commissioner.
(g) (h) Any insurer may satisfy its obligation to make any such
filings by becoming a member of, or a subscriber to, a licensed rating
organization which makes such filings and by authorizing the
commissioner to accept such filings on its behalf, provided that nothing
contained in this chapter shall be construed as requiring any insurer to
become a member of or a subscriber to any rating organization or as
requiring any member or subscriber to authorize the commissioner to
accept such filings on its behalf.
(h) (i) Every insurer which is a member of or a subscriber to a rating
organization shall be deemed to have authorized the commissioner to
accept on its behalf all filings made by the rating organization which
are within the scope of its membership or subscribership, provided:
(1) that any subscriber may withdraw or terminate such
authorization, either generally or for individual filings, by written
notice to the commissioner and to the rating organization and may
then make its own independent filings for any kinds of insurance,
or subdivisions, or classes of risks, or parts or combinations of
any of the foregoing, with respect to which it has withdrawn or
terminated such authorization, or may request the rating
organization, within its discretion, to make any such filing on an
agency basis solely on behalf of the requesting subscriber; and
(2) that any member may proceed in the same manner as a
subscriber unless the rating organization shall have adopted a
rule, with the approval of the commissioner:
(A) requiring a member, before making an independent filing,
first to request the rating organization to make such filing on
its behalf and requiring the rating organization, within thirty
(30) days after receipt of such request, either:
(i) to make such filing as a rating organization filing;
(ii) to make such filing on an agency basis solely on behalf
of the requesting member; or
(iii) to decline the request of such member; and
(B) excluding from membership any insurer which elects to
make any filing wholly independently of the rating
organization.
(i) (j) Under such rules as the commissioner shall adopt, the
commissioner may, by written order, suspend or modify the
requirement of filing as to any kinds of insurance, or subdivision, or
classes of risk, or parts or combinations of any of the foregoing, the
rates for which can not practicably be filed before they are used. Such
orders and rules shall be made known to insurers and rating
organizations affected thereby. The commissioner may make such
examination as the commissioner may deem advisable to ascertain
whether any rates affected by such order are excessive, inadequate, or
unfairly discriminatory.
(j) (k) Upon the written application of the insured, stating the
insured's reasons therefor, filed with the commissioner, a rate in excess
of that provided by a filing otherwise applicable may be used on any
specific risk.
(k) (l) An insurer shall not make or issue a policy or contract except
in accordance with filings which are in effect for that insurer or in
accordance with the provisions of this chapter. Subject to the
provisions of section 6 of this chapter, any rates, rating plans, rules,
classifications, or systems in effect on May 31, 1967, shall be
continued in effect until withdrawn by the insurer or rating
organization which filed them.
(l) (m) The commissioner shall have the right to make an
investigation and to examine the pertinent files and records of any
insurer, insurance producer, or insured in order to ascertain compliance
with any filing for rate or coverage which is in effect. The
commissioner shall have the right to set up procedures necessary to
eliminate noncompliance, whether on an individual policy, or because
of a system of applying charges or discounts which results in failure to
comply with such filing.
(m) (n) This subsection applies to an insurer that issues a
commercial property or commercial casualty insurance policy to a
commercial policyholder. Not more than thirty (30) days after the
insurer begins using a commercial property or commercial casualty
insurance:
(1) rate;
(2) rating plan;
(3) manual of classifications;
(4) form; or
(5) modification of an item specified in subdivision (1), (2), (3),
or (4);
the insurer shall file with the department, for informational purposes only, the item specified in subdivision (1), (2), (3), (4), or (5). Use of an item specified in subdivision (1), (2), (3), (4), or (5) is not conditioned on review or approval by the department. This subsection does not require filing of an individual policy rate if the original manuals, rates, and rules for the insurance plan or program to which the individual policy conforms has been filed with the department.
(b) If such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in section 3(a)(3) of this chapter from the system of expense provisions included in a filing made by the rating organization,
the commissioner shall, if he the commissioner grants the appeal,
order the rating organization to make the requested filing for use by the
appellant. In deciding such appeal the commissioner shall apply the
standards set forth in section 3 of this chapter.
(a) An "acquiring party" is the specific person by whom an acquisition of control of a domestic insurer or of any corporation controlling a domestic insurer is to be effected, and each person who directly, or indirectly through one (1) or more intermediaries, controls the person specified.
(b) An "affiliate" of, or person "affiliated" with, a specific person, is a person that directly, or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
(c) A "beneficial owner" of a voting security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, revocable or irrevocable proxy, or otherwise has or shares:
(1) voting power including the power to vote, or to direct the voting of, the security; or
(2) investment power which includes the power to dispose, or to direct the disposition, of the security.
(d) "Commissioner" means the insurance commissioner of this state.
(e) "Control" (including the terms "controlling", "controlled by", and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the beneficial ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office. Control shall be presumed to exist if any person beneficially owns ten percent (10%) or more of the voting securities of any other person. The commissioner may determine this presumption has been rebutted only by a showing made in the manner provided by section 3(k) of this chapter that control does not exist in fact, after giving all interested persons notice and an opportunity to be heard. Control shall be presumed again to exist upon the acquisition of beneficial ownership of each additional five percent (5%) or more of the voting securities of the other person. The commissioner may determine, after furnishing all persons in
interest notice and opportunity to be heard, that control exists in fact,
notwithstanding the absence of a presumption to that effect.
(f) "Department" means the department of insurance created by
IC 27-1-1-1.
(g) A "domestic insurer" is an insurer organized under the laws of
this state.
(h) "Earned surplus" means an amount equal to the unassigned
funds of an insurer as set forth in the most recent annual statement of
an insurer that is submitted to the commissioner, excluding surplus
arising from unrealized capital gains or revaluation of assets.
(i) "Enterprise risk" means an activity, circumstance, event, or
series of events that involves at least one (1) affiliate of an insurer
that, if not remedied promptly, is likely to have a material adverse
effect upon the financial condition or liquidity of the insurer or the
insurer's insurance holding company system as a whole, including
an activity, circumstance, event, or series of events that would
cause the:
(1) insurer's risk based capital to fall into company action
level under IC 27-1-36; or
(2) insurer to be in hazardous financial condition subject to
IC 27-1-3-7 and rules adopted under IC 27-1-3-7.
(i) (j) An "insurance holding company system" consists of two (2)
or more affiliated persons, one (1) or more of which is an insurer.
(j) (k) "Insurer" has the same meaning as set forth in IC 27-1-2-3,
except that it does not include:
(1) agencies, authorities, or instrumentalities of the United States,
its possessions and territories, the Commonwealth of Puerto Rico,
the District of Columbia, or a state or political subdivision of a
state;
(2) fraternal benefit societies; or
(3) (2) nonprofit medical and hospital service associations.
The term includes a health maintenance organization (as defined in
IC 27-13-1-19) and a limited service health maintenance organization
(as defined in IC 27-13-1-27).
(l) "NAIC" refers to the National Association of Insurance
Commissioners.
(m) "Supervisory college" means a temporary or permanent
forum:
(1) comprised of regulators, including other state, federal, and
international regulators, responsible for the supervision of:
(A) a domestic insurer that is part of an insurance holding
company system that has international operations;
(B) an insurance holding company system described in
clause (A); or
(C) an affiliate of:
(i) a domestic insurer described in clause (A); or
(ii) an insurance holding company system described in
clause (B); and
(2) established to facilitate communication and cooperation
between the regulators described in subdivision (1).
(k) (n) A "person" is an individual, a corporation, a limited liability
company, a partnership, an association, a joint stock company, a trust,
an unincorporated organization, any similar entity or any combination
of the foregoing acting in concert, but shall not include any securities
broker performing no more than the usual and customary broker's
function.
(l) (o) A "policyholder" of a domestic insurer includes any person
who owns an insurance policy or annuity contract issued by the
domestic insurer, any person reinsured by the domestic insurer under
a reinsurance contract or treaty between the person and the domestic
insurer, and any health maintenance organization with which the
domestic insurer has contracted to provide services or protection
against the cost of care.
(m) (p) A "subsidiary" of a specified person is an affiliate controlled
by that person directly or indirectly through one or more
intermediaries.
(n) (q) "Surplus" means the total of gross paid in and contributed
surplus, special surplus funds, and unassigned surplus, less treasury
stock at cost.
(o) (r) "Voting security" includes any security convertible into or
evidencing a right to acquire a voting security.
entered into, or any such solicitation is begun, or prior to the
acquisition of such securities if no offer or agreement is involved:
(1) each acquiring party has filed with the commissioner and has
sent to such insurer and any such controlling corporation a
statement containing the information required by this section;
(2) the offer, request, invitation, agreement, solicitation, or
acquisition has been approved by the commissioner; and
(3) two (2) business days have elapsed following the
commissioner's determination approving the offer, request,
invitation, agreement, solicitation, or acquisition;
all in the manner prescribed in this section.
(b) Unless a statement described in subsection (a) is otherwise
filed, the following apply to an acquisition or a divestiture of a
person's controlling interest in a domestic insurer:
(1) If a controlling person of a domestic insurer seeks to divest
the person's controlling interest, the person shall:
(A) file with the commissioner a confidential notice of the
person's proposed divestiture at least thirty (30) days
before the person ceases control; and
(B) send a copy of the filing required by clause (A) to the
insurer.
(2) The commissioner shall determine whether a person:
(A) described in subdivision (1); or
(B) that seeks to acquire a controlling interest in a
domestic insurer;
is required to obtain from the commissioner approval of the
divestiture or acquisition.
(3) Information obtained by the commissioner under this
subsection is confidential until the conclusion of the
divestiture or acquisition unless the commissioner determines
that maintaining confidentiality of the information interferes
with enforcement of this section.
(b) (c) A statement to be filed with the commissioner under this
section shall be made under oath or affirmation and shall contain the
following information:
(1) The name and address of the acquiring party.
(2) If the acquiring party is an individual, his the individual's
principal occupation and all offices and positions held during the
past five (5) years, and any conviction of crimes other than minor
traffic violations during the past ten (10) years.
(3) If the acquiring party is not an individual, a report of the
nature of its business operations during the past five (5) years or
for such lesser period as the acquiring party and any predecessors
thereof shall have been in existence, including, but not limited to:
(A) information relating to the acquisition or disposition of
control by the acquiring party of any other person and any
subsequent material change in the financial condition,
management, organization, or operations of such other person;
(B) an informative description of the business intended to be
done by the acquiring party and its affiliates;
(C) any plans or proposals for the conduct of the business or
employment of the assets and surplus of the domestic insurer
and any corporation controlling such insurer;
(D) an informative description of any transaction in which the
acquiring party received, employed, or used any affiliate's
assets;
(E) an informative description of any transaction or presently
proposed transaction between the acquiring party and any of
its affiliates in which either such acquiring party or such
affiliate has a direct or indirect material interest; however, no
information need be given as to any such transaction where the
amount involved in the transaction or series of similar
transactions, including all periodic payments or installments
in the case of any lease or agreement providing for periodic
payments or installments, does not or would not exceed one
hundred thousand dollars ($100,000); and
(F) a list of all individuals who are or who have been selected
to become directors or officers of the acquiring party, or who
perform or will perform functions appropriate to such
positions, such list to include for each such individual the
information required by clause subdivision (2). of this
subsection.
(4) The source, nature, and amount of the consideration to be used
in effecting the acquisition of control, a description of any
transaction wherein funds were or are to be obtained for any such
purpose (including any pledge of the insurer's stock, or the stock
of any of the insurer's subsidiaries or controlling affiliates), all
documents evidencing, supporting, referring to, or relating to any
such transaction and the identity of persons who are furnishing or
who will furnish such consideration.
(5) Fully audited financial information as to the earnings and
financial condition of the acquiring party for its preceding five (5)
fiscal years (or for such lesser period as such acquiring party and
any predecessors thereof shall have been in existence), and
similar unaudited information as of a date not earlier than ninety
(90) days prior to the filing of the statement.
(6) Any plans or proposals which the acquiring party may have to
liquidate such domestic insurer or such controlling corporation,
to sell its assets or merge or consolidate it with any person, or to
make any other material change in its investment policy, business,
corporate structure, or management.
(7) The number of shares of any security referred to in subsection
(a) which the acquiring party proposes to acquire, the terms of the
proposed offer, request, invitation, agreement, or acquisition
referred to in subsection (a), and a statement as to the method by
which the terms of the proposal were arrived at.
(8) The amount of each class of any security referred to in
subsection (a) which is beneficially owned or concerning which
there is a right to acquire beneficial ownership by the acquiring
party.
(9) A full description of any contracts, arrangements, or
understandings with respect to any security referred to in
subsection (a) in which the acquiring party proposes to be or is
involved, including but not limited to transfer of any of the
securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or guarantees
of profits, division of losses or profits, or the giving or
withholding of proxies. Such description shall identify the persons
with whom such contracts, arrangements, or understandings have
been or will be entered into.
(10) A description of the purchase of any security referred to in
subsection (a) during the twelve (12) calendar months preceding
the filing of the statement by the acquiring party, including the
dates of purchase, names of the purchasers, and consideration
paid or agreed to be paid therefor.
(11) A description of any recommendations to purchase any
security referred to in subsection (a) made during the twelve (12)
calendar months preceding the filing of the statement by the
acquiring party, or by anyone, based upon interviews or at the
suggestion of such acquiring party.
(12) Copies of the proposed forms of all tender offers for, requests
or invitations for tenders of, exchange offers for, and agreements
to acquire or exchange any securities referred to in subsection (a),
and of the proposed form of additional soliciting material relating
thereto.
(13) The terms of any agreement, contract, or understanding made
or proposed to be made with any broker-dealer as to solicitation
of securities referred to in subsection (a) for tender, and the
amount of any fees, commissions, or other compensation paid or
to be paid to broker-dealers with regard thereto.
(14) A full description of any existing or proposed contracts,
arrangements, or understandings between the acquiring party and
any present or former director, officer, or employee of the
domestic insurer or of any corporation controlling such insurer.
Such description shall identify the persons with whom such
contracts, arrangements, or understandings have been or will be
entered into.
(15) Copies of all studies, analyses, and reports which were
prepared by or for the acquiring party or any affiliate of the
acquiring party for the purpose of evaluating or analyzing the
proposed acquisition of control with respect to market shares,
competition, competitors, markets, and potential for growth or
expansion into product or geographic markets.
(16) If the acquiring party or any affiliate of the acquiring party is
an insurer:
(A) the amount of any premiums, deposits, or annuity
considerations received by the insurer during each of the last
five (5) fiscal years (calculated on an accrual basis) for each
line of insurance business conducted in any section of this
state, and copies of annual statements for each of the last five
(5) fiscal years filed by any such insurer with the insurance
regulatory authority of its domiciliary jurisdiction;
(B) a full and complete description of any direct or indirect
reinsurance relationship between the acquiring party or any
affiliate of the acquiring party and the domestic insurer or any
affiliate of the domestic insurer, together with copies of any
treaties or contracts relating to that relationship; and
(C) such additional information as the commissioner may by
rule or order prescribe as necessary or appropriate to enable
him the commissioner to make the determination required by
subsection (e)(2). (f)(2).
(17) An agreement that a person required to obtain the
commissioner's approval of a statement described in
subsection (a) will file an annual enterprise risk report
described in section 3(l) of this chapter as long as the person
continues to hold a controlling interest in the domestic
insurer.
(18) An acknowledgment that:
(A) a person described in subdivision (17); and
(B) any subsidiary in the insurance holding company
system that is within the person's control;
will, upon the commissioner's request, provide to the
commissioner information that the commissioner considers
necessary to evaluate enterprise risk to the domestic insurer.
(17) (19) Such additional information as the commissioner may
by rule or order prescribe as necessary or appropriate for the
protection of policyholders or in the public interest.
If any material change occurs in the facts set forth in a statement filed
with the commissioner and sent to the insurer and any controlling
corporation under this section, an amendment made under oath or
affirmation setting forth the change, together with copies of all
documents and other material relevant to the change, shall be filed with
the commissioner and sent to the insurer and any controlling
corporation within two (2) business days after any acquiring party
learns of this change.
(c) (d) If any acquiring party is a partnership, limited partnership,
syndicate, or other group, the commissioner may require that the
information called for by subdivisions (1) through (17) of subsection
(b) (c)(1) through (c)(19) shall be given with respect to each partner
of such partnership or limited partnership, each member of such
syndicate or group, and each person who controls such partner or
member. If any such partner, member, person, or acquiring party is a
corporation, the commissioner may require that the information called
for by subdivisions (1) through (17) subsection (c)(1) through (c)(19)
shall be given with respect to all individuals who are or have been
selected to become directors or officers of any such corporation or who
perform or will perform functions appropriate to these positions.
(d) (e) If the proposed acquisition of control referred to in
subsection (a) requires the filing of a registration statement under the
federal Securities Act of 1933 (15 U.S.C. 77a-15 U.S.C. 77aa) or
requires the disclosure of similar information under the federal
Securities Exchange Act of 1934 (15 U.S.C. 78a-15 U.S.C. 78kk) or
under a state law requiring similar registration or disclosure, an
acquiring party may utilize such documents in furnishing the
information called for by the statement.
(e) (f) The commissioner shall hold a public hearing on the
proposed acquisition of control referred to in subsection (a) and shall
thereafter approve such acquisition of control only if he the
commissioner finds, by a preponderance of the evidence, that:
(1) the acquisition of control would not tend to affect adversely
the contractual obligations of the domestic insurer or its ability
and tendency to render service in the future to its policyholders
and the public;
(2) the effect of the acquisition of control would not be
substantially to lessen competition in any line of insurance
business in any section of this state or tend to create a monopoly
therein;
(3) the financial condition of any acquiring party is not such as
might jeopardize the financial stability of the domestic insurer or
of any corporation controlling such insurer, or prejudice the
interest of its policyholders;
(4) the plans or proposals which any acquiring party has to
liquidate the domestic insurer or any such controlling corporation,
sell its assets or consolidate or merge it with any person, or to
make any other material change in its investment policy, business,
corporate structure, or management are fair and reasonable to
policyholders of the domestic insurer and in the public interest;
and
(5) the competence, experience, and integrity of those persons
who would control the operation of the domestic insurer are such
that the acquisition of control would not tend to affect adversely
the general capacity or intention of the domestic insurer to
transact the business of insurance in a safe and prudent manner.
(f) (g) For the purposes of the commissioner's application of the
competitive standard set forth in subsection (e)(2) (f)(2) to a proposed
acquisition:
(1) the acquiring person must file a pre-acquisition notification
that meets the requirements set forth in section 2.5(e) of this
chapter;
(2) the commissioner shall apply the provisions of section 2.5(h)
of this chapter; and
(3) the commissioner may not disapprove the acquisition based
upon the application of subsection (e)(2) (f)(2) if the
commissioner finds that either of the conditions set forth in
section 2.5(i) of this chapter applies to the proposed acquisition.
(g) (h) The public hearing referred to in subsection (e) (f) shall be
held within sixty (60) days after all statements required by subsection
(a) are filed, or within such longer period after the statements are filed
as the commissioner determines upon a showing of good cause
therefor, in the city of Indianapolis at such place, date, and time as the
commissioner shall specify. At least thirty (30) days written notice of
the hearing shall be given by the commissioner to each acquiring party,
the domestic insurer, any corporation controlling such insurer, and to
other persons as the commissioner may designate. In the event that an
amendment to any such statement is filed, the hearing shall be
postponed for a further period not to exceed sixty (60) days after the
filing of such amendment, or for such longer period after the
amendment is filed as the commissioner determines upon a showing of
good cause therefor. If the proposed acquisition of control requires
the approval of the commissioners of more than one (1) state, the
public hearing may be held on a consolidated basis upon the
request of the person that files the statement described in
subsection (a). The person shall file the statement with the NAIC
not more than five (5) days after the person makes the request for
a public hearing. The commissioner of a state may opt out of a
consolidated hearing by notifying the person not more than ten
(10) days after receiving the statement described in subsection (a).
A hearing conducted on a consolidated basis must be public and
held in the United States before the commissioners of the
domiciliary states of the insurers. The commissioners shall hear
and receive evidence and may attend in person or by
telecommunication.
(h) (i) The commissioner shall give notice of the hearing by
publication in a newspaper of general circulation in the city of
Indianapolis, and in the city wherein is located the principal office of
the domestic insurer, and in such other city or cities as he the
commissioner may deem appropriate. Any policyholder of the
domestic insurer who makes a written request to the commissioner is
entitled to a copy of all statements, amendments, or other material filed
with the commissioner by any acquiring party.
(i) (j) The commissioner may retain at the acquiring party's expense
any attorneys, actuaries, accountants, and other experts not otherwise
a part of the commissioner's staff as may be reasonably necessary to
assist the commissioner in reviewing the proposed acquisition of
control. All hearing expenses, including transcript costs, expenses of
publication and of preparing and mailing material to policyholders,
shall be borne equally by each acquiring party. As security for the
payment of such expenses, each acquiring party shall file with the
commissioner an acceptable bond or other deposit in an amount to be
determined by the commissioner.
(j) (k) At such hearing, each acquiring party, the domestic insurer,
any corporation controlling such insurer, policyholders of the domestic
insurer, and any other person whose interests may be affected by the
proposed acquisition of control shall have the right to appear and
become party to the proceeding. Each such person shall have the right
to present evidence, examine and cross-examine witnesses, and offer
oral and written arguments and in connection therewith shall be
entitled to conduct discovery proceedings in the same manner as
provided in the Indiana Rules of Trial Procedure. The commissioner
may employ any sanction or power granted courts in the Indiana Rules
of Trial Procedure, excluding the power of contempt, to enforce his the
commissioner's discovery rulings or orders. The commissioner shall
make a determination within thirty (30) days after the conclusion of
such hearing and shall immediately upon making that determination
notify all persons who appeared and became parties to the proceeding
of that determination. To permit an aggrieved party to perfect an appeal
under IC 27-1-23-12, no offer, request, invitation, agreement, or
acquisition referred to in subsection (a) may be commenced, entered
into, or consummated until two (2) business days have elapsed
following the commissioner's determination approving an acquisition
of control.
(l) If the commissioner determines that a person acquiring
control of a domestic insurer is required to maintain or restore the
capital of the insurer to the level required by Indiana law, the
person shall, not later than sixty (60) days after the closing date of
the acquisition, file with the commissioner evidence that the capital
has been maintained or restored to that level.
(k) (m) Except as otherwise provided in this section, the hearing and
the determination made therein shall be subject to IC 4-21.5-3.
(l) (n) The provisions of this section shall not apply to the following:
(1) Any merger, consolidation, or plan of exchange to be
consummated with the approval of the commissioner under the
laws of this state.
(2) (1) Any transaction to be undertaken under a statutory
procedure for the purchase of dissenting shareholder's stock.
(3) (2) Any transaction to be undertaken under a judicially
approved reorganization.
(4) (3) Any offer, request, invitation, agreement, solicitation, or
acquisition respecting any security of a domestic insurer or of any
corporation controlling such insurer if any acquiring party,
immediately prior to such offer, request, invitation, agreement,
solicitation, or acquisition being commenced, entered into, begun,
or consummated, beneficially owns more than fifty percent (50%)
of all the outstanding voting securities of such domestic insurer
or corporation controlling such insurer.
(5) (4) Any solicitation of proxies respecting any security of a
domestic insurer or of any corporation controlling a domestic
insurer that is undertaken by the management or the board of
directors of the issuer of the security for purposes other than
effecting, directly or indirectly, a transaction that would otherwise
be subject to the requirements of this section.
(6) (5) Any offer, request, invitation, agreement, solicitation, or
acquisition respecting a security of a non-insurance corporation
controlling one (1) or more domestic insurers if all of the
following conditions are met:
(A) the offer, request, invitation, agreement, solicitation, or
acquisition has been approved by the insurance regulatory
authority of any state or territory of the United States of
America other than Indiana, and the insurance regulatory
authority of the state or territory has been accredited by the
National Association of Insurance Commissioners;
(B) the domestic insurer or insurers meet all of the following
conditions, determined in accordance with generally accepted
accounting principles:
(i) the investments in and advances to the domestic insurer
or insurers by the controlling non-insurance corporation and
its other subsidiaries equal less than ten percent (10%) of
the total assets of the controlling non-insurance corporation
and all of its subsidiaries consolidated as of the end of the
most recently completed fiscal year;
(ii) the proportionate share of the controlling non-insurance
corporation and its other subsidiaries in the total assets (after
intercompany eliminations) of the domestic insurer or
insurers equals less than ten percent (10%) of the total assets
of the controlling non-insurance corporation and all of its
subsidiaries consolidated as of the end of the most recently
completed fiscal year; and
(iii) the equity of the controlling non-insurance corporation
and its other subsidiaries in the income from continuing
operations before income taxes, extraordinary items, and the
cumulative effect of a change in accounting principle of the
domestic insurer or insurers is less than ten percent (10%)
of the income of that corporation and all of its subsidiaries
consolidated for the end of the most recently completed
fiscal year; and
(C) the commissioner has not determined that the application
of this section to the offer, request, invitation, agreement,
solicitation, or acquisition is necessary or appropriate for the
protection of policyholders of the domestic insurer or insurers.
(7) (6) Any acquisition of stock of a former mutual by a parent
company, as those terms are defined in IC 27-15-1, that occurs in
connection with the conversion of a mutual insurance company to
a stock insurance company under IC 27-15, provided that no
person acquires control of the parent company.
(m) (o) The courts of this state are hereby vested with jurisdiction
over every acquiring party not resident, domiciled, or authorized to do
business in this state, and over all actions involving each such
acquiring party arising out of violations of this section, and each such
acquiring party shall be deemed to have performed acts equivalent to
and constituting an appointment by the acquiring party of the
commissioner to be his the acquiring party's true and lawful attorney
upon whom may be served all lawful process in any action, suit, or
proceeding arising out of violations of this section. Copies of all such
lawful process shall be served on the commissioner and transmitted by
registered or certified mail by the commissioner to such acquiring party
at his the acquiring party's last known address.
(1) this section;
(2) section 4(a) and 4(c) of this chapter; and
(3) section 4(b) of this chapter or a provision such as the following:
Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within fifteen (15) days after the end of the month in which it learns of each such change or addition.
Any insurer which is subject to registration under this section shall register within fifteen (15) days after it becomes subject to registration, and annually thereafter by March 15 of each year for the previous calendar year, unless the commissioner for good cause shown extends the time for registration, and then within such extended time. The commissioner may require any authorized insurer which is a member of an insurance holding company system but not subject to registration
under this section to furnish a copy of the registration statement or
other information filed by such insurer with the insurance regulatory
authority of its domiciliary jurisdiction.
(b) Every insurer subject to registration shall file a registration
statement on a form prescribed by the commissioner, which shall
contain current information about all of the following:
(1) The capital structure, general financial condition, ownership
and management of the insurer and any person controlling the
insurer.
(2) The identity of every member of the insurance holding
company system.
(3) The following agreements in force, relationships subsisting,
and transactions that are currently outstanding or that have
occurred during the last calendar year between such insurer and
its affiliates:
(i) loans, other investments, or purchases, sales or exchanges
of securities of the affiliates by the insurer or of the insurer by
its affiliates;
(ii) purchases, sales, or exchanges of assets;
(iii) transactions not in the ordinary course of business;
(iv) guarantees or undertakings for the benefit of an affiliate
which result in an actual contingent exposure of the insurer's
assets to liability, other than insurance contracts entered into
in the ordinary course of the insurer's business;
(v) all management and service contracts and all cost-sharing
arrangements, other than cost allocation arrangements based
upon generally accepted accounting principles; and
(vi) reinsurance agreements covering all or substantially all of
one or more lines of insurance of the ceding insurer;
(vii) dividends and other distributions to shareholders; and
(viii) consolidated tax allocation agreements.
(4) Any pledge of the insurer's stock, including stock of any
subsidiary or controlling affiliate, for a loan made to any member
of the insurance holding company system. and
(5) If requested by the commissioner, financial statements of
the insurance holding company system, the parent
corporation of the insurer, or all affiliates, including annual
audited financial statements filed with the federal Securities
and Exchange Commission under the Securities Act of 1933
or the federal Securities Exchange Act of 1934, both as
amended.
(6) Statements reflecting that the insurer's:
(A) board of directors oversees corporate governance and
internal controls; and
(B) officers or senior management have approved and
implemented and maintain and monitor corporate
governance and internal control procedures.
(5) (7) Other matters concerning transactions between registered
insurers and any affiliates as may be included from time to time
in any registration forms prescribed by the commissioner.
(8) Other information that the commissioner requires under
rules adopted under IC 4-22-2.
(c) Every registration statement must contain a summary outlining
all items in the current registration statement representing changes
from the prior registration statement.
(d) No information need be disclosed on the registration statement
filed pursuant to subsection (b) if such information is not material for
the purposes of this section. Unless the commissioner by rule or order
provides otherwise, sales, purchases, exchanges, loans or extensions of
credit, or investments, involving one per cent (1%) or less of an
insurer's admitted assets as of the 31st day of December next preceding
shall not be deemed material for purposes of this section.
(e) Each registered insurer shall keep current the information
required to be disclosed in its registration statement by reporting all
material changes or additions on amendment forms prescribed by the
commissioner within fifteen (15) days after the end of the month in
which it learns of each such change or addition.
(f) A person within an insurance holding company system subject
to registration under this chapter shall provide complete and accurate
information to an insurer when that information is reasonably necessary
to enable the insurer to comply with this chapter.
(g) The commissioner shall terminate the registration of any insurer
which demonstrates that it no longer is subject to the provisions of this
section.
(h) The commissioner may require or allow two (2) or more
affiliated insurers subject to registration under this section to file a
consolidated registration statement or consolidated reports amending
their consolidated registration statement or their individual registration
statements.
(i) The commissioner may allow an insurer which is authorized to
do business in this state and which is a member of an insurance holding
company system to register on behalf of any affiliated insurer which is
required to register under subsection (a) and to file all information and
material required to be filed under this section.
(j) The provisions of this section shall not apply to any insurer, information, or transaction if and to the extent that the commissioner by rule or order shall exempt the same from the provisions of this section.
(k) Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer or such a disclaimer may be filed by such insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between such person and such insurer as well as the basis for disclaiming such affiliation. After a disclaimer has been filed, the insurer shall be relieved of any duty to register or report under this section which may arise out of the insurer's relationship with such person unless and until the commissioner disallows such disclaimer. A disclaimer of affiliation is considered to have been granted unless the commissioner, less than thirty (30) days after receiving a disclaimer, notifies the person filing the disclaimer that the disclaimer is disallowed. The commissioner shall disallow such disclaimer only after furnishing all parties in interest with notice and opportunity to be heard.
(l) The person that ultimately controls an insurer that is subject to registration shall file with the lead state commissioner of the insurance holding company system (as determined by the procedures in the Financial Analysis Handbook adopted by the NAIC) an annual enterprise risk report that identifies, to the best of the person's knowledge, the material risks within the insurance holding company system that could pose enterprise risk to the insurer.
(m) The commissioner may impose on a person a civil penalty of one hundred dollars ($100) per day that the person fails to file, within the period specified, a:
(1) registration statement; or
(2) summary of a registration statement or enterprise risk filing;
required by this section. The commissioner shall deposit a civil penalty collected under this subsection in the department of insurance fund established by IC 27-1-3-28.
(1) The terms shall be fair and reasonable.
(2) Agreements concerning cost sharing services and management must include provisions required by the commissioner in rules adopted under IC 4-22-2.
(b) The following transactions involving a domestic insurer and any person in its insurance holding company system (including amendments or modifications to affiliate agreements previously filed under this chapter) that are subject to any materiality standards described in subdivisions (1) through (5) may not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into such transaction at least thirty (30) days prior thereto, or such shorter period as the commissioner may permit, and the commissioner has not disapproved it within that period:
(1) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided those transactions are equal to or exceed:
(A) with respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and
(B) with respect to life insurers, three percent (3%) of the insurer's admitted assets;
each as of December 31 next preceding.
(2) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes those loans or extensions of credit with the agreement or understanding that the proceeds of such transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer making such
loans or extensions of credit, provided those transactions are
equal to or exceed:
(A) with respect to nonlife insurers, the lesser of three percent
(3%) of the insurer's admitted assets or twenty-five percent
(25%) of surplus as regards policyholders; and
(B) with respect to life insurers, three percent (3%) of the
insurer's admitted assets;
each as of December 31 next preceding.
(3) Reinsurance agreements or modifications thereto, in which the
amount of cash or invested assets transferred by the insurer
including:
(A) reinsurance pooling agreements; and
(B) agreements under which:
(i) a reinsurance premium;
(ii) a change in the insurer's liabilities; or
(iii) the projected reinsurance premium;
in any of the immediately succeeding three (3) years equals
or exceeds five percent (5%) of the insurer's surplus as regards
policyholders, as of December 31 next preceding, including
those agreements that may require as consideration the transfer
of assets from an insurer to a nonaffiliate, if an agreement or
understanding exists between the insurer and nonaffiliate that
any portion of the assets will be transferred to one (1) or more
affiliates of the insurer.
(4) Management agreements, service contracts, cost-sharing
arrangements, lease agreements, and tax allocation agreements.
(5) Material transactions, specified by rule, that the commissioner
determines may adversely affect the interests of the insurer's
policyholders.
This subsection does not authorize or permit any transactions that, in
the case of an insurer not a member of the same insurance holding
company system, would be otherwise contrary to law. Notice
concerning amendments or modifications of a transaction must
include the reasons for the change and the financial impact on the
domestic insurer. Not more than thirty (30) days after an
agreement that was previously filed under this section is
terminated, the domestic insurer shall send written notice of the
termination to the commissioner. The commissioner shall
determine whether a filing concerning the termination is required
and shall notify the domestic insurer of the commissioner's
determination.
(c) A domestic insurer may not enter into transactions that are part
of a plan or series of like transactions with persons within the insurance
holding company system if the purpose of those separate transactions
is to avoid the statutory threshold amount and thus avoid the review
that would occur otherwise.
(d) The commissioner, in reviewing transactions pursuant to
subsection (b), shall consider whether the transactions comply with the
standards set forth in subsection (a) and whether the transactions may
adversely affect the interests of policyholders.
(e) The commissioner shall be notified within thirty (30) days of any
investment of the domestic insurer in any one (1) corporation if the
total investment in that corporation by the insurance holding company
system exceeds ten percent (10%) of the corporation's voting securities.
(f) For purposes of this chapter, in determining whether an insurer's
surplus is reasonable in relation to the insurer's outstanding liabilities
and adequate to its financial needs, the following factors, among others,
shall be considered:
(1) The size of the insurer as measured by its assets, capital and
surplus, reserves, premium writings, insurance in force and other
appropriate criteria.
(2) The extent to which the insurer's business is diversified among
the several lines of insurance.
(3) The number and size of risks insured in each line of business.
(4) The extent of the geographical dispersion of the insurer's
insured risks.
(5) The nature and extent of the insurer's reinsurance program.
(6) The quality, diversification, and liquidity of the insurer's
investment portfolio.
(7) The recent past and projected future trend in the size of the
insurer's surplus as regards policyholders.
(8) The surplus as regards policyholders maintained by other
comparable insurers in respect of the factors described in
subdivisions (1) through (7).
(9) The adequacy of the insurer's reserves.
(10) The quality and liquidity of investments in subsidiaries,
except that the commissioner may discount or treat any such
investment in subsidiaries as a disallowed asset for purposes of
determining the adequacy of surplus whenever in his the
commissioner's judgment such investment so warrants.
(11) The quality of the earnings of the insurer and the extent to
which the reported earnings of the insurer include extraordinary
items.
(g) No domestic insurer subject to registration under section 3 of
this chapter shall pay an extraordinary dividend or make any other
extraordinary distribution to its security holders until:
(1) thirty (30) days after the commissioner has received notice of
the declaration thereof and has not within such period
disapproved such payment; or
(2) the commissioner shall have approved such payment within
such thirty (30) day period.
(h) For purposes of subsection (g), an extraordinary dividend or
distribution is any dividend or distribution of cash or other property
whose fair market value, together with that of other dividends or
distributions made within the twelve (12) consecutive months ending
on the date on which the proposed dividend or distribution is scheduled
to be made, exceeds the greater of:
(1) ten percent (10%) of such insurer's surplus as regards
policyholders as of the most recently preceding December 31; or
(2) the net gain from operations of such insurer, if such insurer is
a life insurer, or the net income, if such insurer is not a life
insurer, for the twelve (12) month period ending on the most
recently preceding December 31.
(i) Notwithstanding any other provision of law, a domestic insurer
may declare an extraordinary dividend or distribution which is
conditional upon the commissioner's approval thereof, but such a
declaration shall confer no rights upon shareholders until:
(1) the commissioner has approved the payment of such dividend
or distribution; or
(2) the commissioner has not disapproved the payment within the
thirty (30) day period referred to in subsection (g).
(j) The commissioner may impose a civil penalty of five
thousand dollars ($5,000) on a person who fails to file a transaction
as required by this section. The commissioner shall deposit a civil
penalty collected under this subsection in the department of
insurance fund established by IC 27-1-3-28.
(1) Examine an insurer registered under section 3 of this chapter, and affiliates of the insurer, to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by:
(A) the person who ultimately controls the insurer;
(B) one (1) or more other persons within the insurance holding company system; or
(C) the insurance holding company system;
on a consolidated basis.
(2) Order any insurer registered under section 3 of this chapter to produce such records, books, or other information papers in the possession of the insurer or its affiliates as are reasonably necessary to ascertain the financial condition or legality of conduct of such insurer. In the event such insurer fails to comply with such order, the commissioner shall have the power to examine such insurer or affiliates to obtain such information.
(b) The commissioner shall exercise
(c) The commissioner may order an insurer registered under section 3 of this chapter to produce information that is not in the possession of the insurer if the insurer is able to obtain the information under contractual relationships, statutory obligations, or another method. If the insurer is unable to obtain the information, the insurer shall provide to the commissioner a detailed explanation of the reason for the insurer's inability and the identity of the person that holds the information. If the commissioner determines that the detailed explanation is without merit, the commissioner may:
(1) after notice and hearing, impose on the insurer a civil penalty of not more than one thousand dollars ($1,000) for each day that the insurer does not produce the information; or
(2) suspend or revoke the insurer's certificate of authority.
The commissioner shall deposit a civil penalty collected under this subsection in the department of insurance fund established by IC 27-1-3-28.
books, and papers pursuant to subsection (a) shall be liable for and
shall pay the expense of such examination.
(f) If an insurer fails to comply with an order under this section,
the commissioner may:
(1) examine affiliates of the insurer to obtain information;
(2) issue subpoenas;
(3) administer oaths; and
(4) examine under oath any person;
to determine compliance with this section. The commissioner may
petition a court with jurisdiction for an order to compel a person
that refuses to comply with a subpoena to testify or produce
evidence. A witness who testifies under this section is entitled to the
same compensation as the compensation to which a witness is
entitled under IC 34, which must be paid by the insurer that is
under examination.
(1) Determine whether the insurer or affiliate is in compliance with this chapter.
(2) Assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes that apply to the insurer or affiliate.
(3) Examine the insurer or affiliate.
(b) The powers of the commissioner under subsection (a) include the following:
(1) Initiation of the establishment of the supervisory college.
(2) Clarification of the membership and participation of other supervisors in the supervisory college.
(3) Clarification of the functions of the supervisory college and the role of other regulators, including the establishment of a group supervisor.
(4) Coordination of the activities of the supervisory college, including planning meetings and information sharing procedures.
(5) Establishment of a crisis management plan.
(c) An insurer that is described in subsection (a) shall pay the commissioner's reasonable expenses of participation in a
supervisory college, including travel expenses. The commissioner
may establish a regular assessment to the insurer for payment of
the expenses.
(d) The commissioner may enter into agreements in accordance
with the requirements that apply to an agreement entered into with
the NAIC under section 6 of this chapter to specify the activities of
the commissioner and other regulators participating in the
supervisory college.
(e) This section does not delegate to a supervisory college a
commissioner's authority to regulate or supervise the insurer
described in subsection (a) or the insurer's affiliates within the
commissioner's jurisdiction.
(b) The commissioner and any other person:
(1) who receives documents, materials, or other information while acting under the authority of the commissioner; or
(2) with whom the documents, materials, or other information are shared;
under this chapter is not permitted or required to testify in a
private civil action concerning any documents, materials, or other
information that is confidential under subsection (a).
(c) The commissioner may do the following:
(1) Except as provided in subdivision (2), share documents,
materials, and other information described in this section with
the following if the recipient agrees in writing, and provides
written verification that the recipient has the legal authority,
to maintain the confidential and privileged status of the
documents, materials, and other information:
(A) Other state, federal, and international regulatory
agencies.
(B) The NAIC and affiliates and subsidiaries of the NAIC.
(C) State, federal, and international law enforcement
authorities.
(D) Members of a supervisory college described in section
5.1 of this chapter.
(2) With respect to confidential and privileged documents,
materials, and other information reported under section 3(l)
of this chapter, share the documents, materials, and other
information with commissioners who:
(A) regulate insurance in states with a law that is
substantially similar to subsection (a); and
(B) have agreed in writing not to disclose the documents,
materials, or other information.
(3) Receive documents, materials, or other information from:
(A) the NAIC and affiliates and subsidiaries of the NAIC;
(B) regulatory and law enforcement officials of domestic or
foreign jurisdictions;
if the commissioner maintains the confidential or privileged
status of the documents, materials, and other information that
are received with notice or the understanding that the
documents, materials, and other information are confidential
or privileged under the laws of the jurisdiction that is the
source of the documents, materials, and other information.
(d) The commissioner shall enter into written agreements with
the NAIC governing sharing and use of information provided
under this chapter, including the following:
(1) Procedures and protocols concerning the confidentiality
and security of information shared:
(A) with the NAIC and affiliates and subsidiaries of the
NAIC under this chapter; and
(B) by the NAIC with other state, federal, and
international regulators.
(2) A statement that, with respect to information shared with
and used by the NAIC and affiliates and subsidiaries of the
NAIC under this chapter:
(A) the commissioner maintains ownership of the
information; and
(B) the use of the information is subject to the direction of
the commissioner.
(3) A requirement that, if confidential information of an
insurer that is in the possession of the NAIC under this
chapter is subject to a request or subpoena to the NAIC for
production or disclosure, the NAIC will provide prompt
notice to the insurer.
(4) A requirement that the NAIC and affiliates and
subsidiaries of the NAIC will allow intervention by an insurer
in a judicial or administrative action under which the NAIC
or affiliates or subsidiaries of the NAIC may be required to
disclose confidential information concerning the insurer that
has been shared with the NAIC or affiliates or subsidiaries of
the NAIC under this chapter.
(e) The sharing of information by the commissioner under this
chapter is not considered to be a delegation of regulatory
authority. The commissioner is solely responsible for the
administration, implementation, and enforcement of this chapter.
(f) Disclosure to or sharing by the commissioner of documents,
materials, or other information under this chapter is not a waiver
of any applicable privilege or claim of confidentiality in the
documents, materials, or other information.
(g) Documents, materials, and other information in the
possession or control of the NAIC under this section are:
(1) confidential;
(2) privileged;
(3) not subject to subpoena; and
(4) not discoverable or admissible in evidence in a private civil
action.
(1) The filing of an RBC report by an insurer that indicates that:
(A) the insurer's total adjusted capital is:
(i) greater than or equal to its regulatory action level RBC;
but
(ii) less than its company action level RBC;
(B) if a life and health insurer, the insurer:
(i) has total adjusted capital that is greater than or equal to
its company action level RBC but less than the product of
two and five-tenths (2.5) multiplied by its authorized control
level RBC; and
(ii) has a negative trend; or
(C) if a property and casualty insurer, a health maintenance
organization, or a limited service health maintenance
organization, the insurer:
(i) has total adjusted capital that is greater than or equal to
its company action level RBC but less than the product of
three (3) multiplied by its authorized control level RBC; and
(ii) has a negative trend.
(2) The notification by the commissioner to the insurer of an
adjusted RBC report that indicates that:
(A) the insurer's total adjusted capital is:
(i) greater than or equal to its regulatory action level RBC;
but
(ii) less than its company action level RBC;
(B) if a life and health insurer, the insurer:
(i) has total adjusted capital that is greater than or equal to
its company action level RBC but less than the product of
two and five-tenths (2.5) multiplied by its authorized control
level RBC; and
(ii) has a negative trend; or
(C) if a property and casualty insurer, a health maintenance
organization, or a limited service health maintenance
organization, the insurer:
(i) has total adjusted capital that is greater than or equal to
its company action level RBC but less than the product of
three (3) multiplied by its authorized control level RBC; and
(ii) has a negative trend;
unless the insurer challenges the adjusted RBC report under
section 44 of this chapter.
(3) The notification by the commissioner to the insurer that the
commissioner has, after a hearing under section 44 of this chapter,
rejected the insurer's challenge to an adjusted RBC report
described in subdivision (2).
copy of the report, including any exhibits or other attachments filed
with the report, shall be filed with the
(1) department. and
(2) National Association of Insurance Commissioners.
(1) IC 27-1-3.
(2) IC 27-1-3.1.
(3) IC 27-1-5-3.
(4) IC 27-1-7-14 through IC 27-1-7-16.
(5) IC 27-1-7-21 through IC 27-1-7-23.
(6) IC 27-1-9.
(7) IC 27-1-10.
(8) IC 27-1-13-3 through IC 27-1-13-4.
(9) IC 27-1-13-6 through IC 27-1-13-9.
(10) IC 27-1-15.6.
(11) IC 27-1-18-2.
(12) IC 27-1-20-1.
(13) IC 27-1-20-4.
(14) IC 27-1-20-6.
(15) IC 27-1-20-9 through IC 27-1-20-11.
(16) IC 27-1-20-14.
(17) IC 27-1-20-19 through IC 27-1-20-21.3.
(18) IC 27-1-20-23.
(19) IC 27-1-20-30.
(20) IC 27-1-20-35.
(1) files with the commissioner evidence of the insurer's submission to Indiana jurisdiction;
(2) submits to Indiana authority to examine the insurer's books and records;
(3) is:
(A) licensed to transact insurance or reinsurance in at least one (1) state; or
(B) in the case of a United States branch of an alien
(4) files annually with the commissioner a copy of the insurer's annual statement filed with the insurance department of the insurer's state of domicile and a copy of the insurer's most recent audited financial statement; and
(5) demonstrates to the commissioner's satisfaction that the insurer:
(A) has adequate financial capacity to meet the insurer's reinsurance obligations; and
(B) is otherwise qualified to assume reinsurance from domestic insurers.
(b) An assuming insurer is considered to meet the requirement specified in subsection (a)(5) as of the time of the assuming insurer's application for accreditation if:
(2) the assuming insurer's accreditation has not been denied by the commissioner within ninety (90) days
of the assuming insurer's application.
(1) is organized, or in the case of a United States office of a foreign banking organization licensed, under the laws of the United States or any state thereof;
(2) is regulated, supervised, and examined by United States
federal or state authorities having regulatory authority over banks
and trust companies; and
(3) has been determined by the commissioner or the Securities
Valuation Office of the National Association of Insurance
Commissioners to meet the standards of financial condition and
standing as are considered necessary and appropriate to regulate
the quality of financial institutions whose letters of credit will be
acceptable to the commissioner.
(1) The reinsurer meets the requirements of one (1) of the following:
(A) Only with respect to cessions of the kind of insurance or reinsurance business for which the assuming insurer is licensed or otherwise permitted to assume in:
(i) the assuming insurer's state of domicile; or
(ii) with respect to a United States branch of an alien assuming insurer, the state through which the alien assuming insurer is entered and licensed to engage in the business of insurance or reinsurance;
section 8, 9, or 10 of this chapter.
(D) Section 11.5 of this chapter.
(2) The reinsurance contract provides in substance that, in the event of the insolvency of the ceding insurer, the reinsurance is payable under a contract reinsured by the assuming insurer on the basis of reported claims allowed in the liquidation proceedings, subject to court approval, without diminution because of the insolvency of the ceding insurer. Payments under this subdivision must be made directly to the ceding insurer or to the ceding insurer's domiciliary liquidator except as provided in IC 27-9-3-30.1. The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to an assuming insurer of the pendency of a claim against the ceding insurer on the contract reinsured within a
reasonable time after the claim is filed in the liquidation
proceeding. During the pendency of the claim, any assuming
insurer may investigate the claim and interpose in the proceeding
where the claim is to be adjudicated, at the assuming insurer's
expense, any defenses that the assuming insurer considers
available to the ceding insurer or the liquidator. If two (2) or more
assuming insurers are involved in the same claim and a majority
in interest elect to interpose a defense to the claim, the expense
must be apportioned under the terms of the reinsurance agreement
as though the expense had been incurred by the ceding insurer.
(1) that:
(A) is domiciled
(B) in the case of a United States branch of an alien
a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this chapter;
(2) that:
(A) maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000); and
(B) submits to the authority of Indiana to examine the insurer's books and records;
provided, however, that the requirement of clause (A) does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system; and
(3) that complies with section 12 of this chapter.
credit for reinsurance shall be allowed a domestic ceding insurer when
the reinsurance is ceded to an assuming insurer that maintains a trust
fund in a qualified United States financial institution (as defined in
section 6 of this chapter) for the payment of the valid claims of its
United States policyholders and ceding insurers, their assigns, and
successors in interest, and the assuming insurer complies with section
12 of this chapter. In order for the commissioner to determine the
sufficiency of the trust fund, the assuming insurer shall report annually
to the commissioner substantially the same information as that required
to be reported by licensed insurers on the National Association of
Insurance Commissioners' annual statement form. The assuming
insurer shall submit to the examination of the assuming insurer's
books and records by the commissioner and shall bear the expense
of the examination. A trust maintained under this section shall comply
with the provisions of this section.
(b) The form of a trust described in subsection (a) and any
amendments to the trust must:
(1) have been approved by:
(A) the commissioner of the state where the trust is
domiciled; or
(B) the commissioner of another state who, under the
terms of the trust instrument, has accepted principal
regulatory oversight of the trust; and
(2) be filed with the commissioner of every state in which the
ceding insurer beneficiaries of the trust are domiciled.
(b) A trust shall comply with (c) The following requirements apply
to the following categories of assuming insurer:
(1) In the case of a trust of a single assuming insurer, the
following apply:
(A) The trust fund shall consist of a trusteed account
representing funds in trust in an amount not less than the
assuming insurer's liabilities attributable to business written in
the reinsurance ceded by United States and ceding insurers.
(B) Except as provided in clause (C), the assuming insurer
shall maintain a trusteed surplus of not less than twenty
million dollars ($20,000,000).
(C) After the assuming insurer has, for at least three (3)
full years, permanently discontinued underwriting new
business secured by the trust and the commissioner that
has principal regulatory oversight of the trust has
performed a risk assessment:
(i) that may involve an actuarial review, including an
independent analysis of reserves and cash flows; and
(ii) that considers all material risk factors, including the
lines of business involved, the stability of the incurred
loss estimates, and the effect of the surplus requirements
specified in clause (B) on the assuming insurer's liquidity
or solvency;
and determined that a surplus level that is less than the
amount required by clause (B) is adequate for the
protection of United States ceding insurers, policyholders,
and claimants in light of reasonably foreseeable adverse
loss development, the commissioner may authorize a
reduction in the trusteed surplus amount required by
clause (B). However, the amount required by clause (B)
may not be reduced to an amount less than thirty percent
(30%) of the assuming insurer's liabilities that are
attributable to reinsurance ceded by United States ceding
insurers covered by the trust.
(2) In the case of a trust of a group including incorporated and
individual unincorporated underwriters that are is an assuming
insurer, the following apply:
(A) For reinsurance ceded under reinsurance agreements
with an inception, amendment, or renewal date after
December 31, 1992, the trust shall consist of a trusteed
account representing the liabilities of the group attributable to
business written in the in an amount not less than the
respective underwriters' several liabilities attributable to
business ceded by United States ceding insurers to any
underwriter of the group.
(B) Notwithstanding any other provision of this chapter,
for reinsurance ceded under reinsurance agreements with
an inception date before January 1, 1993, and not amended
or renewed after December 31, 1992, the trust shall consist
of a trusteed account in an amount not less than the
respective underwriters' several insurance and reinsurance
liabilities attributable to business written in the United
States.
(B) (C) In addition to the trusts described in clauses (A)
and (B), the group shall maintain in trust a trusteed surplus of
which one hundred million dollars ($100,000,000) shall be
held jointly for the benefit of United States ceding insurers of
any member of the group and for all years of account.
(C) (D) The incorporated members of the group shall not be
engaged in any business other than underwriting as a member
of the group and shall be subject to the same level of solvency
regulation and solvency control by the group's domiciliary
regulator as are the unincorporated members.
The group shall make available to the commissioner an annual
certification of the solvency of each underwriter by the
domiciliary regulator of the group and its independent public
accountants. Not more than ninety (90) days after the group's
financial statements are due to be filed with the group's
domiciliary regulator, the group shall provide to the
commissioner an annual certification by the group's
domiciliary regulator of the solvency of each underwriter
member. However, if a certification is unavailable, the group
shall provide to the commissioner financial statements of each
underwriter member of the group, prepared by independent
public accountants.
(3) In the case of a trust of a group of incorporated insurers
underwriters under common administration that are is an
assuming insurer,
(A) the group:
(i) shall report annually to the commissioner as required
under subsection (a);
(ii) (A) must have continuously transacted an insurance
business outside the United States for at least three (3) years
immediately before making application for accreditation;
(iii) shall submit to Indiana's authority to examine the books
and records of the group and bear the expense of the
examination;
(iv) (B) shall have maintain an aggregate policyholders'
surplus of at least ten billion dollars ($10,000,000,000); and
(C) shall maintain a trust fund in an amount not less than
the group's several liabilities attributable to business ceded
by United States ceding insurers to any member of the
group under reinsurance contracts issued in the name of
the group;
(v) (D) shall maintain a joint trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held jointly
for the benefit of United States ceding insurers of any member
of the group as additional security for any such liabilities; and
(B) each member of the group (E) shall, not more than ninety
(90) days after the group's financial statements are due to
be filed with the group's domiciliary regulator, make
available to the commissioner:
(i) an annual certification of the each underwriter
member's solvency by the member's domiciliary regulator;
and its
(ii) financial statements of each underwriter member of
the group prepared by the member's independent public
accountant. and
(C) The trust shall be in an amount equal to the several
liabilities of the group attributable to business ceded by United
States ceding insurers to any member of the group pursuant to
reinsurance contracts issued in the name of such group.
(c) A trust shall be in a form approved by the commissioner.
(d) The trust instrument of a trust shall provide that contested claims
are valid and enforceable upon the final order of any court with
jurisdiction in the United States.
(e) A trust shall vest legal title to the trust's assets in the trustees of
the trust for the trust's United States policyholders and benefit of the
assuming insurer's United States ceding insurers, their assigns, and
successors in interest.
(f) A trust and the assuming insurer shall be subject to examination
as determined by the commissioner.
(g) A trust shall remain in effect for as long as the assuming insurer
shall have has outstanding obligations due under the reinsurance
agreements subject to the trust.
(h) Not later than February 28 of each year the trustees trustee of
a trust permitted under this section shall report in writing to the
commissioner the following information:
(1) The balance of the trust.
(2) A listing of the trust's investments at the preceding year end.
(3) A certification of the date of termination of the trust, if
applicable, or a certification that the trust shall not expire before
the following December 31.
(i) Credit may only be permitted under this section if an assuming
insurer also complies with section 12 of this chapter.
(1) has been certified as a certified reinsurer by the commissioner in Indiana; and
(2) secures the assuming insurer's obligations as required by this section.
(b) An assuming insurer must do all of the following to be eligible for certification under this section:
(1) Be domiciled and licensed to engage in insurance or reinsurance business in a jurisdiction that has been determined under subsection (d) or (e) by the commissioner to be a qualified jurisdiction.
(2) Maintain minimum capital and surplus, or the equivalent, in an amount determined by the commissioner in rules adopted under IC 4-22-2.
(3) Maintain financial strength ratings from at least two (2) rating agencies that the commissioner determines acceptable under rules adopted under IC 4-22-2.
(4) Agree to submit to the jurisdiction of Indiana.
(5) Appoint the commissioner as the assuming insurer's agent for service of process in Indiana.
(6) Agree to provide security for one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement of a final United States judgment.
(7) Agree to meet information filing requirements determined by the commissioner, at the time of application for certification and on an ongoing basis.
(8) Satisfy any other requirements specified by the commissioner.
(c) An association that includes incorporated and individual unincorporated underwriters may be certified under this section if all of the following requirements are met:
(1) The association must meet all of the requirements described in subsection (b).
(2) The association must satisfy the association's minimum capital and surplus requirements through the capital and surplus equivalents (net of liabilities) of the association and the association's members, including a joint central fund:
(A) that may be applied to any unsatisfied obligation of the association or any of the association's members; and
(B) in an amount determined by the commissioner to provide adequate protection.
(3) The incorporated members of the association:
(A) may not engage in any business other than
underwriting as a member of the association; and
(B) are subject to the same level of regulation and solvency
control by the association's domiciliary regulator as the
level that applies to the unincorporated members of the
association.
(4) Not more than ninety (90) days after the association's
financial statements are due to be filed with the association's
domiciliary regulator, the association must provide to the
commissioner:
(A) an annual certification by the association's domiciliary
regulator of the solvency; or
(B) if a certification is unavailable, financial statements
prepared by the independent public accountant;
of each underwriter member of the association.
(d) The commissioner shall create and publish a list of
non-United States jurisdictions that the commissioner determines
are qualified jurisdictions. The following requirements apply to the
commissioner's creation, publication, maintenance, and use of the
list created and published under this subsection:
(1) In determining whether a jurisdiction is a qualified
jurisdiction, the commissioner shall:
(A) initially and on an ongoing basis, evaluate the
appropriateness and effectiveness of the reinsurance
supervisory system of the jurisdiction;
(B) consider the rights, benefits, and extent of reciprocal
recognition afforded by the jurisdiction to reinsurers
licensed and domiciled in the United States;
(C) consider the list of qualified jurisdictions that is
published by the National Association of Insurance
Commissioners committee process; and
(D) consider any other factors that the commissioner
considers necessary, including any of the following:
(i) The framework under which the assuming insurer is
regulated.
(ii) The structure and authority of the domiciliary
regulator with respect to solvency requirements and
financial surveillance.
(iii) The substance of financial and operating standards
for assuming insurers in the domiciliary jurisdiction.
(iv) The form and substance of financial reports required
to be filed or made public by reinsurers in the
domiciliary jurisdiction, and the accounting principals
used.
(v) The domiciliary regulator's willingness to cooperate
with United States regulators and the commissioner.
(vi) The history of performance by assuming insurers in
the domiciliary jurisdiction.
(vii) Documented evidence of substantial problems in the
domiciliary jurisdiction with the enforcement of final
United States judgments.
(viii) Relevant international standards or guidance with
respect to mutual recognition of reinsurance supervision
adopted by the International Association of Insurance
Supervisors or a successor organization.
(2) A jurisdiction considered for qualification under this
subsection must:
(A) agree to share information and cooperate with the
commissioner with respect to all certified reinsurers that
are domiciled in the jurisdiction; and
(B) not have been determined by the commissioner not to
have adequately and promptly enforced final United States
judgments and arbitration awards;
to be determined to be a qualified jurisdiction.
(3) If the commissioner determines that a jurisdiction is
qualified, but the qualified jurisdiction does not appear on the
National Association of Insurance Commissioners list
described in subdivision (1)(C), the commissioner must
thoroughly document the commissioner's justification for the
determination in accordance with criteria established by the
commissioner in rules adopted under IC 4-22-2.
(e) The commissioner:
(1) shall consider a United States jurisdiction that meets the
requirements for accreditation under the National Association
of Insurance Commissioners financial standards and
accreditation program to be a qualified jurisdiction; and
(2) may, instead of revocation, indefinitely suspend a certified
reinsurer's certification under this section if the certified
reinsurer's domiciliary jurisdiction ceases to be a qualified
jurisdiction.
(f) The commissioner shall:
(1) after considering the financial strength ratings assigned to
the certified reinsurer by rating agencies considered
acceptable to the commissioner according to rules adopted
under IC 4-22-2, assign a rating to each certified reinsurer;
and
(2) publish a list of all certified reinsurers and the rating
assigned to each certified reinsurer under subdivision (1).
(g) A certified reinsurer shall secure obligations assumed from
United States ceding insurers under this section at a level
consistent with the rating assigned by the commissioner under
subsection (f), as follows:
(1) For a domestic ceding insurer to qualify for full financial
statement credit for reinsurance ceded to a certified
reinsurer, the certified reinsurer shall maintain security:
(A) in a form acceptable to the commissioner and
consistent with section 14 of this chapter; or
(B) in a multibeneficiary trust under section 11 of this
chapter.
(2) If a certified reinsurer:
(A) maintains a trust to fully secure the certified
reinsurer's obligations under section 11 of this chapter;
and
(B) chooses to secure the certified reinsurer's obligations
incurred as a certified reinsurer under this section in the
form of a multibeneficiary trust;
the certified reinsurer shall maintain separate trust accounts
for the certified reinsurer's obligations under section 11 of
this chapter and for the certified reinsurer's obligations
incurred under reinsurance agreements issued or renewed as
a certified reinsurer with reduced security under this section
or comparable laws of other United States jurisdictions.
(3) If a certified reinsurer described in subdivision (2) has not
agreed:
(A) in the language of the trust; and
(B) under an agreement with the commissioner that has
principal regulatory oversight of each trust account
described in subdivision (2);
to fund, upon termination of any of the trust accounts and
from the surplus of the terminated trust account, any
deficiency of any of the other trust accounts, the
commissioner shall revoke the certified reinsurer's
certification under this section.
(4) The minimum trusteed surplus requirements of section 11
of this chapter do not apply with respect to a multibeneficiary
trust that is maintained by a certified reinsurer for the
purpose of securing obligations incurred by the certified
reinsurer under this section. However, the multibeneficiary
trust must maintain a minimum trusteed surplus of at least
ten million dollars ($10,000,000).
(5) If the security for obligations incurred by a certified
reinsurer under this section is insufficient, the commissioner:
(A) shall reduce the allowable credit by an amount in
proportion to the deficiency; and
(B) may impose further reductions in the allowable credit
if the commissioner determines that a material risk exists
that the certified reinsurer's obligations will not be paid in
full when the obligations are due.
(6) If the certification of an assuming insurer under this
section is revoked, suspended, inactivated, or voluntarily
surrendered, the commissioner shall, for purposes of
reinsurance in force:
(A) except as provided in clause (B), regulate the assuming
insurer as if the assuming insurer were a certified
reinsurer; and
(B) require that the assuming insurer provide security for
one hundred percent (100%) of the assuming insurer's
obligations attributable to the reinsurance in force.
However, clause (B) does not apply to an assuming insurer
after certification is suspended or inactivated if, after
suspension or inactivation, the commissioner assigns a new
rating to the assuming insurer that is higher than the rating
assigned under subsection (f)(1) before certification was
suspended or inactivated.
(h) If an assuming insurer that applies for certification under
this section is a certified reinsurer in a jurisdiction that is
accredited by the National Association of Insurance
Commissioners, the commissioner may:
(1) defer to the:
(A) accredited jurisdiction's certification of the assuming
insurer; and
(B) rating assigned to the assuming insurer by the
accredited jurisdiction; and
(2) consider the assuming insurer a certified reinsurer in
Indiana without the assuming insurer meeting the
requirements of subsection (b)(2) and (b)(3).
(i) A certified reinsurer that ceases to assume new business in
Indiana may request that the commissioner allow the certified
reinsurer to maintain certification in inactive status to continue to
qualify for the reduction in security for the certified reinsurer's
in-force business in Indiana. If inactive status is granted by the
commissioner, the certified reinsurer shall continue to comply with
this section and the commissioner shall, after considering the
reasons that the certified reinsurer has ceased assuming new
business in Indiana, assign a new rating to the certified reinsurer.
(j) If a certified reinsurer continues throughout the year to pay
claims in a timely manner, the certified reinsurer is not, for one (1)
year after the date of the first liability reserve entry by a ceding
company resulting from a loss from a catastrophic occurrence
recognized by the commissioner, required to post security for the
catastrophe recoverables in the following lines of business (as
reported on the National Association of Insurance Commissioners
annual financial statement and specifically related to the
catastrophic occurrence):
(1) Fire.
(2) Allied lines.
(3) Farmowners multiple peril.
(4) Homeowners multiple peril.
(5) Commercial multiple peril.
(6) Inland marine.
(7) Earthquake.
(8) Motor vehicle physical damage.
(1) That in the event of the failure of the assuming insurer to perform the assuming insurer's obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall:
(A) submit to the jurisdiction of any court with jurisdiction in any state of the United States;
(B) comply with all requirements necessary to give the court described in clause (A) jurisdiction; and
(C) abide by the final decision of the court or of any appellate court in the event of an appeal.
(2) To designate the commissioner or an attorney
proceeding instituted by or on behalf of the ceding company.
insurer.
This section is not intended to conflict with or override the obligation
of the parties to a reinsurance agreement to arbitrate their disputes, if
such an obligation is created in the agreement.
(1) That if the trust fund is inadequate because the:
(A) trust fund contains less than the amount required by section 11(c) of this chapter; or
(B) grantor of the trust is declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the law of the grantor's domiciliary state or country;
the trustee shall comply with an order of the commissioner that has regulatory oversight of the trust or of a court with jurisdiction directing the trustee to transfer all assets of the trust fund to the commissioner that has regulatory oversight of the trust.
(2) That:
(A) the assets of the trust will be distributed by, and claims will be filed with and valued by, the commissioner that has regulatory oversight of the trust; and
(B) the assets of the trust will be distributed under, and claims will be filed and valued under, the laws of the domiciliary state of the trust that apply to liquidation of domestic insurers.
(3) That if the commissioner that has regulatory oversight of the trust determines that any part of the assets of the trust fund is unnecessary to satisfy the claims of the United States
ceding insurers of the grantor of the trust, the commissioner
that has regulatory oversight of the trust shall return the
unnecessary part of the assets to the trustee for distribution
under the trust agreement.
(4) That the grantor of the trust waives any legal right under
United States law that is inconsistent with this section.
(1) After the reinsurer receives from the commissioner notice and the opportunity for a hearing, the commissioner may order suspension or revocation of the accreditation or certification, which takes effect after the hearing unless one (1) of the following occurs:
(A) The reinsurer waives the right to a hearing.
(B) The commissioner's order is based on:
(i) regulatory action by the reinsurer's domiciliary jurisdiction; or
(ii) the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in the reinsurer's domiciliary jurisdiction or in the reinsurer's primary certifying jurisdiction described in section 11.5(h) of this chapter.
(C) The commissioner determines that an emergency requires immediate action and a court with jurisdiction has not stayed the commissioner's action based on the determination.
(2) If a reinsurer's accreditation or certification is suspended under this section, credit for reinsurance is not allowed for a reinsurance contract that is issued or renewed by the reinsurer during the period of suspension except to the extent that the reinsurer's obligations under the reinsurance contract are secured under section 14 of this chapter.
(3) If a reinsurer's accreditation or certification is revoked under this section, credit for reinsurance is not allowed for a reinsurance contract that is issued or renewed by the reinsurer after the effective date of the revocation except to the extent that the reinsurer's obligations under the reinsurance contract are secured under section 11.5(g) or 14
of this chapter.
(1) exceeds; or
(2) is determined by the domestic ceding insurer to be likely to exceed;
fifty percent (50%) of the domestic ceding insurer's last reported surplus to policyholders, notify the commissioner concerning the actual or likely exposure.
(b) A ceding insurer shall diversify the ceding insurer's reinsurance program. A domestic ceding insurer shall, not more than thirty (30) days after:
(1) ceding to any single assuming insurer or group of affiliated assuming insurers reinsurance in excess of; or
(2) determining that the reinsurance ceded to any single assuming insurer or group of affiliated assuming insurers is likely to exceed;
twenty percent (20%) of the domestic ceding insurer's gross written premium in the preceding calendar year, notify the commissioner concerning the actual or likely exposure.
(c) A notice required by subsection (a) or (b) must include evidence that the domestic ceding insurer is safely managing the actual or likely exposure.
(b) The reduction permitted under subsection (a) shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder. The security must be held:
(1) in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer;
this section is permitted in the amounts held by or on behalf of the
ceding insurer in or
(2) in the case of a trust, for the ceding insurer held in a qualified
United States financial institution (as defined in section 6 of this
chapter).
(c) The security described under subsection (b) may be in the
following forms:
(1) Cash.
(2) Securities listed by the Securities Valuation Office of the
National Association of Insurance Commissioners, including
securities that are considered exempt from filing (as defined
by the Purposes and Procedures Manual of the Securities
Valuation Office), and qualifying as admitted assets.
(3) Clean, irrevocable, unconditional letters of credit:
(A) issued or confirmed by a qualified United States financial
institution (as defined in section 5 of this chapter);
(B) effective not later than December 31 in the year for which
the filing is being made; and
(C) in the possession of or in trust for the ceding company
insurer on or before the filing date of its the ceding insurer's
annual statement.
Letters of credit that meet applicable standards of issuer
acceptability as of the dates of their issuance (or confirmation)
shall, notwithstanding the issuing (or confirming) institution's
subsequent failure to meet applicable standards of issuer
acceptability, continue to be acceptable as security until the
earlier of their expiration, extension, renewal, modification, or
amendment.
(4) Any other form of security acceptable to the commissioner.
application and annually, copies of the following:
(A) Audited financial statements, regulatory filings, and
actuarial opinions filed with the assuming insurer's domiciliary
regulator.
(B) A report in a form substantially similar to the applicable
National Association of Insurance Commissioners Annual
Filing Blank.
(C) A report of recoverables that are:
(i) in dispute; or
(ii) more than ninety (90) days past due.
(D) Financial statements of the assuming insurer, the assuming
insurer's parent, and affiliated reinsurers.
(d) The commissioner shall do the following:
(1) On an ongoing basis:
(A) evaluate the:
(i) regulatory systems of alien jurisdictions; and
(ii) rights, benefits, and extent of reciprocal recognition
afforded by alien jurisdictions to reinsurers that are
domiciled and licensed in the United States;
(B) determine the appropriate approach to recognizing the
regulatory systems of alien jurisdictions described in clause
(A); and
(C) publish a list of alien jurisdictions whose reinsurers may
be approved by the commissioner as assuming insurers for
which credit for reinsurance may be allowed under this
chapter.
(2) In determining the alien jurisdictions to be included on the list
published under subdivision (1)(C), the commissioner shall
consider the following:
(A) Reciprocal treatment by the alien jurisdiction of reinsurers
that are domiciled and licensed in the United States.
(B) Solvency procedures involving ceding insurers that are
domiciled and licensed in the United States.
(C) Whether the alien jurisdiction adequately and promptly
enforces final United States judgments or arbitration awards.
(D) Whether the alien jurisdiction agrees to share information
and cooperate with the commissioner with respect to
reinsurers that are domiciled and licensed in the alien
jurisdiction.
(E) Relevant international standards for mutual recognition of
reinsurance regulation.
(3) Consider adoption of recommendations by the National
Association of Insurance Commissioners for inclusion on the list
published under subdivision (1)(C).
(e) If an assuming insurer or a group of assuming insurers for which
credit for reinsurance is allowed under subsection (a) continues
throughout the year to pay claims in a timely manner, the assuming
insurer or group of assuming insurers is not required to post collateral
for the following catastrophe recoverables for one (1) year after the
date of the first liability reserve entry by a ceding company resulting
from a loss from a defined catastrophe recognized by the
commissioner:
(1) Fire.
(2) Allied lines.
(3) Farmowners multiple peril.
(4) Homeowners multiple peril.
(5) Commercial multiple peril.
(6) Inland marine.
(7) Earthquake.
(8) Motor vehicle physical damage.
(f) The commissioner may, in lieu of granting full credit under this
section and subject to subsection (g), reduce the amount:
(1) required to be held in trust under section 11 of this chapter; or
(2) of security required to be held under section 14 of this chapter.
(g) The commissioner may, under subsection (f), reduce the amount
of required collateral only if the amount of required collateral
remaining is not less than the amount specified in the required
collateral column in the following table, based on the financial strength
rating that is lowest in the table and applies to the assuming insurer or
group of assuming insurers:
Required Financial Strength Ratings
Collateral
A.M. Best
Standard
Moody's
Fitch
and Poor's
Ratings
0% A++
AAA
Aaa
AAA
10% A+
AA+, AA,Aa1, Aa2,
AA+, AA,
AA-
Aa3
AA-
20% A, A-
A+, A, A-
A1, A2, A3
A+, A, A-
75% B++, B+
BBB+, BBB,
Baa1, Baa2,
BBB+, BBB,
BBB-
Baa3
BBB-
100% B, B-, C++,
BB+, BB,
Ba1, Ba2,
BB+, BB,
C+, C, C-,
BB-, B+, B,
Ba3, B1, B2,
BB-, B+, B,
D, E, F
B-,CCC,
B3, Caa, Ca,
B-, CCC+,
CC, C, D, R
C
CC, CCC-,
(1) for an expedited external grievance filed under section 13(a)(2)(A) of this chapter, within
(2) for a standard
make a determination to uphold or reverse the insurer's appeal resolution under IC 27-8-28-17 based on information gathered from the covered individual or the covered individual's designee, the insurer, and the treating health care provider, and any additional information that the independent review organization considers necessary and appropriate.
(b) When making the determination under this section, the independent review organization shall apply:
(1) standards of decision making that are based on objective clinical evidence; and
(2) the terms of the covered individual's accident and sickness insurance policy.
(c) In an external grievance described in
(d) The independent review organization shall notify the insurer and the covered individual of the determination made under this section:
(1) for an expedited external grievance filed under section 13(a)(2)(A) of this chapter, within twenty-four (24) hours after making the determination; and
(2) for a standard external grievance filed under section 13(a)(2)(B) of this chapter, within seventy-two (72) hours after making the determination.
subsection (b) unless the licensee is on probation or the licensee's
license was revoked or suspended before that date by the commissioner
or upon notice served upon the commissioner that the insurer or
employer of any recovery agent has canceled the licensee's authority to
act for the insurer or employer.
(b) A license must be renewed under this article according to the
following schedule:
(1) A licensee whose last name commences with the letters A
through H shall renew a license before the last day of August
every other calendar year beginning August 1993.
(2) A licensee whose last name commences with the letters I
through R shall renew a license before the last day of September
every other calendar year beginning September 1993.
(3) A licensee whose last name commences with the letters S
through Z shall renew a license before the last day of October
every other calendar year beginning October 1993.
(c) A licensee who is issued a new license with not more than one
(1) year remaining shall pay fifty percent (50%) of the fee set forth in
section 4 of this chapter.
(d) (b) A license that has expired may be reinstated if:
(1) the licensee:
(A) applies for reinstatement not more than ninety (90) days
after the expiration date;
(B) is not on probation;
(C) has not previously been denied a license;
(D) pays:
(i) a pro rata part of the license fee required under section 7
of this chapter; based on the renewal schedule set forth in
subsection (b); plus
(ii) to the commissioner a license reinstatement fee of one
hundred dollars ($100); and
(E) meets all other requirements for licensure; and
(2) the license was not revoked or suspended at the time that the
license expired.
(1) has continuously maintained a license in effect;
(2) pays a renewal fee of:
(A) six hundred
(B) three hundred dollars ($300) for recovery agents;
(3) has fulfilled the continuing education requirement as required under subsection (b);
(4) satisfactorily completes a renewal examination if required by the commissioner; and
(5) has in all other respects complied with and been subject to this article.
(b) A licensee shall complete at least six (6) hours of continuing education courses that:
(1) are approved under section 7.1 of this chapter; and
(2) apply to the licensee's particular license, including instruction in the laws that relate to the conduct of a bail agent or recovery agent;
during each license period. A continuing education course that is used to fulfill the continuing education requirements for an insurance producer license under IC 27-1-15.7 may not be used to satisfy the continuing education requirement set forth in this section.
(c) After the receipt of the licensee's application for renewal, the current license continues in effect until the renewal license is issued, suspended, or denied for cause.
(1) shall obtain from the commissioner approval of the courses and instructors before the courses are conducted;
(2) shall annually pay to the commissioner a reasonable fee, as determined by the commissioner;
(3) must have been:
(A) a full-time resident of Indiana and
for at least five (5) of the immediately preceding ten (10) years; or
(B) a bail agent association operating in Indiana and approved by the commissioner; and
(4) shall comply with any other requirements established by the commissioner.
However, the commissioner may waive the full-time residency requirement specified in subdivision (3)(A).
(b) A provider described in subsection (a) may charge a reasonable fee for attendance at an approved course.
(c) A fee paid under subsection (a)(2) must be:
(1) deposited in the bail bond enforcement and administration fund created under IC 27-10-5-1; and
(2) used to implement this article.
(d) The commissioner shall:
(1) establish criteria for approval or disapproval of instructors and courses required for:
(A) licensure under sections 3 and 5 of this chapter; and
(B) license renewal under section 7 of this chapter; and
(2) approve or disapprove instructors and courses specified in subdivision (1);
that pertain to the duties and responsibilities of a bail agent and recovery agent, including instruction concerning the laws that relate to the conduct of a bail agent and recovery agent.
(1) allow an enrollee or the enrollee's representative to file a written request with the health maintenance organization for an appeal of the health maintenance organization's grievance resolution under IC 27-13-10-8 not later than one hundred twenty (120) days after the enrollee is notified of the resolution under IC 27-13-10-8; and
(2) provide for:
(A) an expedited appeal for a grievance related to an illness, a disease, a condition, an injury, or a disability that would seriously jeopardize the enrollee's:
(i) life or health; or
(ii) ability to reach and maintain maximum function; or
(B) a standard appeal for a grievance not described in clause (A).
An enrollee may file not more than one (1) appeal of a health maintenance organization's grievance resolution under this chapter.
(b) Subject to the requirements of subsection (d), when a request is filed under subsection (a), the health maintenance organization shall:
(1) select a different independent review organization for each appeal filed under this chapter from the list of independent review organizations that are certified by the department under section 8 of this chapter; and
(2) rotate the choice of an independent review organization among all certified independent review organizations before repeating a selection.
(c) The independent review organizations shall assign a medical review professional who is board certified in the applicable specialty for resolution of an appeal.
(d) The independent review organization and the medical review professional conducting the external review under this chapter may not have a material professional, familial, financial, or other affiliation with any of the following:
(1) The health maintenance organization.
(2) Any officer, director, or management employee of the health maintenance organization.
(3) The physician or the physician's medical group that is proposing the service.
(4) The facility at which the service would be provided.
(5) The development or manufacture of the principal drug, device, procedure, or other therapy that is proposed by the treating physician.
However, the medical review professional may have an affiliation under which the medical review professional provides health care services to enrollees of the health maintenance organization and may have an affiliation that is limited to staff privileges at the health facility if the affiliation is disclosed to the enrollee and the health maintenance organization before commencing the review and neither the enrollee nor the health maintenance organization objects.
(e) The enrollee
(b) This SECTION expires January 1, 2015.
(1) after June 30, 2012; and
(2) under a reinsurance agreement that has an inception, renewal, or anniversary date after December 31, 2012.
(b) This SECTION expires January 1, 2015.
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