Bill Text: IN HB1240 | 2010 | Regular Session | Introduced
Bill Title: Various insurance matters.
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2010-02-23 - Committee report: amend do pass, adopted [HB1240 Detail]
Download: Indiana-2010-HB1240-Introduced.html
Citations Affected: IC 5-22-1-2; IC 16-42; IC 27-1; IC 27-4-5-2;
IC 27-7-3; IC 27-8; IC 27-13.
Synopsis: Various insurance matters. Makes various changes to the
law concerning: (1) pharmacy actions with respect to prescriptions; (2)
disclosures of insurer information; (3) insurer examinations; (4) annual
audited financial reporting; (5) foreign and alien insurers requirements;
(6) insurance producer licensing and continuing education; (7) records
of insurer held securities; (8) insurance holding company transactions;
(9) insurance administrator licensing; (10) an unauthorized insurers
exception in relation to an industrial insured; (11) consistency in
compliance with laws by various types of insurers and health
maintenance organizations; (12) requirements for discretionary groups
for purposes of accident and sickness insurance; and (13) small
employer group insurance requirements. Makes conforming
amendments. Repeals: (1) definitions of unused terms for purposes of
the annual audited financial reporting law; (2) a provision concerning
notice of claim recoding by insurance administrators; (3) an obsolete
cross reference for purposes of the small employer group insurance
law; and (4) the small employer group voluntary reinsurance program
law.
Effective: July 1, 2010.
January 11, 2010, read first time and referred to Committee on Insurance.
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
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
(1) The commission for higher education.
(2) A state educational institution. However, IC 5-22-5-9 and IC 5-22-15 apply to a state educational institution.
(3) Military officers and military and armory boards of the state.
(4) An entity established by the general assembly as a body corporate and politic. However, IC 5-22-15 applies to a body corporate and politic.
(5) A local hospital authority under IC 5-1-4.
(6) A municipally owned utility under IC 8-1-11.1 or IC 8-1.5.
(7) Hospitals established and operated under IC 16-22-1 through IC 16-22-5, IC 16-22-8, IC 16-23-1, or IC 16-24-1.
(8) A library board under IC 36-12-3-16(b).
(9) A local housing authority under IC 36-7-18.
(10) Tax exempt Indiana nonprofit corporations leasing and operating a city market owned by a political subdivision.
(11) A person paying for a purchase or lease with funds other than public funds.
(12) A person that has entered into an agreement with a governmental body under IC 5-23.
(13) A municipality for the operation of municipal facilities used for the collection, treatment, purification, and disposal in a sanitary manner of liquid and solid waste, sewage, night soil, and industrial waste.
(14) The department of financial institutions established by IC 28-11-1-1.
(15) The insurance commissioner in retaining an examiner for purposes of IC 27-1-3.1-9.
(1) complies with the requirements under section 11(a)(1) of this chapter; and
(2) contains the label information on a:
(A) braille label that is affixed to the immediate container in which the drug is delivered; or
(B) recorded audio device that is permanently attached to the immediate container in which the drug is delivered.
(1) the practitioner must:
(A) sign on the line under which the words "May substitute" appear; or
(B) for an electronically transmitted prescription, electronically transmit the instruction "May substitute."; and
(2) the pharmacist must, before filling the prescription, inform the customer of the substitution.
(b) This section does not authorize any substitution other than
substitution of a generically equivalent drug product.
(b) This chapter does not prevent or prohibit the commissioner from disclosing the content of an examination report, preliminary examination report, or results, or any matter relating thereto, to the National Association of Insurance Commissioners, the insurance department of any other state or country, or to law enforcement officials of Indiana or any other state or agency of the federal government at any time, if the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this chapter.
(c) If the commissioner determines that regulatory action is appropriate as a result of any examination, the commissioner may initiate any proceedings or actions authorized by law.
(d) This chapter does not limit the commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action that the commissioner may, in the commissioner's sole discretion, consider appropriate.
obtained.
(1) in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice;
(2) Canadian chartered if the insurer audited by the accountant is a Canadian insurer; or
(3) British chartered if the insurer audited by the accountant is a British insurer.
(1) controls;
(2) is controlled by; or
(3) is under common control with;
a specified person.
(1) a committee or equivalent body established by the board of directors of an entity to oversee:
(A) the accounting and financial reporting processes; and
(B) audits of financial statements;
of an insurer or insurer group;
(2) if elected by the controlling person of an entity that controls an insurer group and solely for purposes of this chapter, a committee or equivalent body established by the board of directors of the entity to oversee:
(A) the accounting and financial reporting processes; and
(B) audits of financial statements;
of the entity; or
(3) if subdivision (1) or (2) does not apply, the entire board of directors of the insurer or entity that controls an insurer.
(1) The individual does not, other than in the individual's capacity as a member of an audit committee, a board of directors, or another board committee of the entity, accept any consulting fee, advisory fee, or other compensation from the entity.
(2) The individual is not associated with:
(A) an affiliate of the entity; or
(B) a subsidiary of the entity or affiliate.
(b) An individual who is not an independent member under subsection (a) may be considered to be an independent member for purposes of an audit committee if:
(1) another law requires participation on a board of directors by an individual who is not an independent member;
(2) the individual is a member of the audit committee by virtue of the individual's participation on the board of directors described in subdivision (1); and
(3) the individual is not an officer or employee of the insurer or an affiliate of the insurer.
(1) authorized to transact insurance business in Indiana and subject to the reporting requirements of IC 27-1-23; or
(2) identified by the management personnel of an insurer to assess the effectiveness of the insurer's internal control over financial reporting.
[EFFECTIVE JULY 1, 2010]: Sec. 3.3. (a) As used in this chapter,
"internal control over financial reporting" means a process that is:
(1) implemented by the board of directors, management
personnel, and other personnel of an entity; and
(2) designed to provide reasonable assurance that the entity's
financial statements are reliable.
(b) The term includes policies and procedures that:
(1) pertain to the maintenance of records to accurately and
fairly reflect, in reasonable detail:
(A) transactions involving; and
(B) disposition of;
assets; and
(2) provide reasonable assurance that:
(A) transactions are recorded as necessary to permit
preparation of financial statements;
(B) receipts and expenditures are made only when
authorized by management personnel or directors; and
(C) unauthorized acquisition, use, or disposition of assets
that could have a material effect on financial statements is
prevented or detected in a timely manner.
(1) Section 404; and
(2) SEC regulations promulgated under Section 404;
of the federal Sarbanes-Oxley Act of 2002.
(1) The preapproval requirements of Section 201 (Section 10A(i) of the federal Securities Exchange Act of 1934).
(2) The audit committee independence requirements of Section 301 (Section 10A(m)(3) of the federal Securities Exchange Act of 1934).
(3) The internal control over financial reporting requirements of Section 404 (Item 308 of SEC regulation S-K).
(b) The term includes any audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents, and schedules or commentaries that:
(1) are prepared or obtained by the
(2) support the
(b)
(1) direct written premiums of less than one million dollars ($1,000,000) in any calendar year;
(2) less than one thousand (1,000) policyholders or certificate holders of
(3) assumed premiums under contracts or treaties of reinsurance of less than one million dollars ($1,000,000) in a calendar year;
is exempt from this chapter with respect to that year. However, the commissioner may require compliance with this chapter upon a finding that compliance with this chapter is necessary for the commissioner to carry out a statutory responsibility.
(c) A foreign or an alien insurer that files an audited financial report in another state
country's requirement for filing of annual audited financial reports is
exempt from sections 6 through 13 of this chapter, except sections
7.2 and 7.4 of this chapter, with respect to the year of that the annual
audited financial report, from the requirement to file an audited
financial report with the commissioner under this chapter, if:
(1) the commissioner has found the other state's or country's
requirement for filing of audited financial reports to be
substantially similar to the requirements of this chapter;
(2) copies a copy of the annual audited financial report, the
report on significant deficiencies in communication of internal
controls, control related matters noted in an audit, and the
accountant's letter of qualifications filed with the other state or
country are filed with the commissioner in accordance with the
filing dates set forth in sections 8, 6, 12, and 12.5 of this chapter;
and
(3) a copy of a notification of an adverse financial condition
report that is filed with the other state is filed with the
commissioner within the time specified in section 11 of this
chapter.
(d) A foreign or an alien insurer that files a report of internal
control over financial reporting in another state is exempt from
filing the same report under this chapter if:
(1) the other state has reporting requirements substantially
similar to this chapter; and
(2) the report is filed with the commissioner of insurance of
the other state in a timely manner.
This (e) Subsection (c) or (d) does not prevent or limit the
commissioner from ordering, conducting, or performing examinations
of foreign or alien insurers under the rules, regulations, and practices,
and procedures of the department under IC 27-1-3.1.
(b) An extension of the June 1 filing date may be granted by the commissioner for thirty (30) days upon a showing by the insurer and
independent auditor the insurer's accountant of the reasons for
requesting the extension and a determination by the commissioner that
there is good cause for an extension. The request for an extension must
be submitted in writing at least ten (10) days before the due date and
must include sufficient detail to permit the commissioner to make an
informed decision with respect to the requested extension.
(c) If an extension is granted under subsection (b), a similar
extension of thirty (30) days is granted for the filing of the insurer's
report of internal control over financial reporting.
(d) An insurer required to file an annual audited financial
report under this chapter shall designate a group of individuals
constituting the insurer's audit committee.
(1) the financial position of the
(2) the results of the
in conformity with statutory accounting practices prescribed, or otherwise permitted, by the department of insurance of the state of domicile.
(1) The report of the insurer's
(2) A balance sheet reporting admitted assets, liabilities, capital, and surplus.
(3) A statement of operations.
(4) A statement of cash flow.
(5) A statement of changes in capital and surplus.
(6) Notes to financial statements. The notes must:
(A) be those required by the National Association of Insurance
Commissioners' annual statement instructions and any other
notes required by statutory accounting practices, which must
the National Association of Insurance Commissioners'
accounting practices and procedures manual; and
(B) include the following:
(A) a reconciliation of differences, if any, between the audited
statutory financial statements included in the audited
financial report and the annual financial statement filed by the
insurer under IC 27-1-20-21, including a written description of
the nature of these differences.
(B) A summary of the ownership and relationships of the
domestic insurer and all affiliated companies.
(d) (c) The financial statements included in a domestic an insurer's
annual audited financial report shall be prepared in the same form, and
using language and groupings substantially the same, as the relevant
sections of the annual statement of the insurer filed with the
commissioner under IC 27-1-20-21.
(e) (d) The financial statements included in a domestic an insurer's
annual audited financial report must be comparative, presenting the
amounts as of December 31 of the year of the report and comparative
amounts as of the immediately preceding December 31. However, in
the first year in which an insurer is required to file an annual audited
financial report under this chapter, the comparative data may be
omitted.
(1) a foreign or an alien insurer that has a certificate of authority to transact insurance business in Indiana; or
(2) an insurer that is a SOX compliant entity; or
(3) a wholly owned subsidiary of a SOX compliant entity.
(b) Each member of an insurer's audit committee must be a member of the board of directors of:
(1) the insurer; or
(2) an entity elected under subsection (d) as described in section 1.4(2) of this chapter.
(c) If an independent member of an audit committee ceases to be independent for reasons beyond the member's reasonable control, the member, with notice from the responsible entity to the commissioner, may remain an audit committee member until the earlier of:
(1) the date of the next annual meeting of the responsible entity; or
(2) one (1) year after the occurrence of the event that caused the member to cease being an independent member.
(d) If the controlling person of an insurer elects to designate an audit committee for purposes of this chapter, the controlling person shall provide written notice:
(1) in a timely manner before filing of the insurer's annual audited financial report; and
(2) including a description of the basis for the election;
to the insurance commissioner that regulates each affected insurer. The controlling person may change an election by providing written notice of the change to the applicable insurance commissioner, including a description of the basis for the change. An election is effective until rescinded.
(e) The audit committee of an insurer is directly responsible for the:
(1) appointment, compensation, and oversight of the work; and
(2) resolution of financial reporting disagreements with the insurer's management personnel;
of an accountant in the accountant's preparation or issuance of the insurer's annual audited financial report or related work under this chapter. An accountant reports directly to the audit committee of the insurer.
(f) An audit committee shall require the accountant that performs for an insurer an audit required by this chapter to timely report to the audit committee in accordance with Statement on Auditing Standards No. 114 of the American Institute of Certified Public Accountants, including all of the following:
(1) All significant accounting policies and material permitted practices.
(2) All material alternative disclosures and treatments of financial information within statutory accounting principles that have been discussed with management personnel of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant.
(3) Other material written communications between the accountant and the management personnel of the insurer, including a management letter or schedule of unadjusted differences.
(g) If:
(1) an insurer is a member of an insurance holding company system; and
(2) any substantial differences among insurer members in the insurance holding company system are identified to the audit committee of the insurance holding company system;
the reports required by subsection (f) may be provided to the audit committee on an aggregate basis for all insurer members.
(h) The proportion of independent members of an audit committee must meet or exceed the following requirements:
(1) If the insurer's immediately preceding calendar year direct written and assumed premiums are not more than three hundred million dollars ($300,000,000), there is no minimum requirement for independent members.
(2) If the insurer's immediately preceding calendar year direct written and assumed premiums are more than three hundred million dollars ($300,000,000) and not more than five hundred million dollars ($500,000,000), at least fifty percent (50%) of members must be independent members.
(3) If the insurer's immediately preceding calendar year direct written and assumed premiums are more than five hundred million dollars ($500,000,000), at least seventy-five percent (75%) of members must be independent members.
(i) An insurer that has direct written and assumed premiums (excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program) equal to less than five hundred million dollars ($500,000,000) may apply to the commissioner for a waiver from the requirements of this section based on hardship.
(j) If the commissioner has granted an insurer a waiver from the requirements of subsection (i), the insurer shall, with the insurer's annual statement filing, file evidence of the relief with the:
(1) states in which the insurer is authorized to do business; and
(2) National Association of Insurance Commissioners.
If a nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the grant of the waiver in an electronic format that is acceptable to the National Association of Insurance Commissioners.
an insurer shall not, directly or indirectly, in connection with an
audit, review, or communication required under this chapter:
(1) make or cause to be made a materially false or misleading
statement to an accountant; or
(2) omit, or cause another person to omit, a material fact
necessary to avoid misleading an accountant.
(b) A director or an officer, or another person acting under the
direction of a director or an officer, of an insurer shall not, directly
or indirectly, coerce, manipulate, mislead, or fraudulently
influence an accountant engaged in the performance of an audit
under this chapter if the director, officer, or other person knows or
should know that the action could result in rendering the insurer's
financial statements materially misleading. Actions prohibited
under this subsection include actions to coerce, manipulate,
mislead, or fraudulently influence the accountant:
(1) to issue or reissue a report on an insurer's financial
statements that is not warranted due to material violations of
statutory accounting principles, generally accepted auditing
standards, or other professional or regulatory standards;
(2) not to perform audit, review, or other procedures required
under generally accepted auditing standards or other
professional standards;
(3) not to withdraw an issued report; or
(4) not to communicate matters to the insurer's audit
committee.
(b)
auditor the insurer's accountant that:
(1) states that the independent auditor accountant is aware of the
provisions of IC 27 and the administrative rules of the department
of insurance of the insurer's state of domicile that relate to
auditing, accounting and financial matters; and
(2) affirms that the independent auditor accountant will express
it's the accountant's opinion on the financial statements of the
domestic insurer in the terms of their conformity to the statutory
accounting practices prescribed or otherwise permitted by the
department, specifying such exceptions as the independent
auditor accountant may believe appropriate.
The domestic insurer shall file a copy of this letter with the
commissioner.
(c) If an independent auditor accountant that served as the
accountant for the immediately preceding annual audited the most
recent financial report filed by the insurer with the commissioner under
this chapter subsequently ceases to be the independent auditor
accountant for the insurer, the insurer shall:
(1) not more than five (5) business days after the cessation of the
independent auditor's accountant's services, notify the
commissioner in writing of the identity and address of the new
independent auditor; cessation;
(2) not more than ten (10) business days after the notification
given in under subdivision (1), furnish the commissioner with a
separate letter that states whether in the twenty-four (24) months
preceding the engagement cessation of the new independent
auditor accountant's services there were any disagreements
between the insurer and its the former independent auditor
accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the satisfaction of the former
independent auditor accountant, would have caused the former
independent auditor accountant to make reference to the subject
matter of the disagreement in connection with the former
independent auditor's statement of its accountant's opinion. on
the insurer's financial report, and, if there was such a
disagreement, provides a description of the disagreement.
Disagreements required to be reported under this subdivision
include those at the decision making level that were resolved:
(A) to the former accountant's satisfaction; and
(B) not to the former accountant's satisfaction; and
(3) comply with subsection (d).
For the purposes of this subsection, "decision making level" refers to the personnel of the insurer who are responsible for the presentation of the insurer's financial statements and the personnel of the
(d)
(1) provide its former
(2) request in writing its former
The
(1) is not an accountant under section 1 of this chapter; or
(2) has entered into an indemnification agreement or a release from liability with respect to the audit of an insurer.
(c) Except as otherwise provided in this chapter, the commissioner shall recognize an accountant as qualified if the accountant:
(1) is an accountant under section 1 of this chapter; and
(2) conforms to the standards of the accountant's profession as contained in the:
(A) Code of Professional Ethics and Pronouncements of the American Institute of Certified Public Accountants; and
(B) Rules of Professional Conduct of the Indiana State Board of Accountancy;
or a similar code.
(d) A qualified accountant may enter into an agreement with an insurer to have disputes between the accountant and the insurer related to an audit resolved by mediation or arbitration. However, if a delinquency proceeding is commenced against the insurer under IC 27-9, a mediation or arbitration provision operates only at the option of the statutory successor of the insurer.
(1) The number of partners, expertise of the partners, or number of insurance clients in the currently registered firm.
(2) The premium volume of the
(3) The number of jurisdictions in which the
(1) The individual has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act under federal law (18 U.S.C. 1961 through 1968)
(2) The individual has been found to have violated the insurance law of this state with respect to any previous reports submitted
under this chapter. or
(3) The individual has demonstrated a pattern or practice of
failing to detect or disclose material information in previous
reports filed under this chapter.
(g) The commissioner may not recognize as a qualified
accountant, nor accept an annual audited financial report
prepared in whole or part by, a person that provides to an insurer,
contemporaneously with the audit, any of the following nonaudit
services:
(1) Bookkeeping or other services related to the accounting
records or financial statements of the insurer.
(2) Financial information systems design and implementation.
(3) Appraisal or valuation services, fairness opinions, or
contribution in kind reports.
(4) Actuarially oriented advisory services involving the
determination of amounts recorded in the financial statements
of the insurer. This subdivision does not include the
accountant's assistance to an insurer in understanding the
methods, assumptions, and inputs used in the determination
of amounts recorded in the financial statements if it is
reasonable to conclude that the assistance will not be subject
to audit procedures during an audit of the insurer's financial
statements. Additionally, this subdivision does not include the
issuance by the accountant's actuary of an actuarial opinion
or certification concerning an insurer's reserves if the
following conditions are met:
(A) Neither the accountant nor the actuary has performed
any management functions or made any management
decisions for the insurer.
(B) The insurer has competent personnel, or engages a
third party actuary, to estimate the reserves for which
management personnel take responsibility.
(C) The actuary tests the reasonableness of the reserves
after the insurer's management personnel have determined
the amount of the reserves.
(5) Internal audit outsourcing services.
(6) Management functions or human resources.
(7) Broker, dealer, investment adviser, or investment banking
services.
(8) Legal services or expert services unrelated to the audit.
(9) Any other services that the commissioner determines by
rule are impermissible.
(h) An insurer that has direct written and assumed premiums
totaling less than one hundred million dollars ($100,000,000) in a
calendar year may request relief from subsection (g) by filing with
the commissioner a written statement describing the reasons the
insurer should be exempt from subsection (g). The commissioner
may grant the relief if, upon review of the written statement, the
commissioner finds that compliance with subsection (g) would
constitute a financial or organizational hardship on the insurer.
(i) The commissioner shall not recognize a person as an
accountant qualified for a particular insurer if the person
employed, as the person's partner or senior manager, an individual
who:
(1) was involved in the audit in the individual's capacity as a
partner or senior manager;
(2) served:
(A) as a member of the board;
(B) as the president;
(C) as the chief executive officer;
(D) as the controller;
(E) as the chief financial officer;
(F) as the chief accounting officer; or
(G) in another position equivalent to a position specified in
clauses (A) through (F);
for the insurer; and
(3) participated in the audit of the insurer in the individual's
capacity described in subdivision (2) during the one (1) year
period preceding the date on which the most current statutory
opinion is due.
However, an insurer may apply to the commissioner for relief from
this subsection on the basis of unusual circumstances.
(j) A qualified accountant that performs an audit may perform
for an insurer other nonaudit services, including tax services, that
are not described in subsection (g) or that do not conflict with
subsection (g)(2) if the performance of the nonaudit services is
preapproved by the insurer's audit committee under subsection (k).
(k) Audit services and nonaudit services provided by an
accountant to an insurer must be preapproved by the insurer's
audit committee. However, the requirement for preapproval of
nonaudit services may be waived if:
(1) the insurer is:
(A) a SOX compliant entity; or
(B) a wholly owned subsidiary of a SOX compliant entity;
or
(2) all of the following apply:
(A) The aggregate amount paid for the nonaudit services
provided to the insurer constitutes not more than five
percent (5%) of the total amount of fees paid by the
insurer to the accountant during the fiscal year in which
the nonaudit services are provided.
(B) The insurer did not recognize at the time the
accountant was engaged to serve as the insurer's
accountant that the services were nonaudit services.
(C) Before completion of the audit, the nonaudit services
are promptly brought to the attention of the audit
committee and approved by:
(i) the audit committee; or
(ii) one (1) or more members of the audit committee who
are the members of the board of directors to whom
authority to grant approvals has been delegated by the
audit committee.
(d) (l) The commissioner may conduct a hearing under IC 4-21.5
IC 4-21.5-3 to determine whether an independent auditor engaged by
a domestic insurer accountant is sufficiently independent of that
domestic insurer to be capable of exercising independent judgment and
qualified and, after considering the evidence presented, may:
(1) rule that the accountant is not qualified for purposes of
expressing an objective the accountant's opinion on the financial
statements in the annual audited financial report filed by the
insurer under this chapter; If the commissioner determines that
the auditor is not sufficiently independent of the insurer, the
commissioner shall and
(2) require the insurer to replace the auditor accountant with
another that is sufficiently independent of accountant whose
relationship with the insurer is qualified within the meaning of
this chapter.
(m) An audit committee may delegate to one (1) or more
designated members of the audit committee the authority to grant
a preapproval required under subsection (k). The decisions of a
member to whom this authority is delegated must be presented to
the full audit committee at each scheduled meeting of the audit
committee.
(n) If the commissioner has granted an insurer any relief under
subsection (e), (h), or (i), the insurer shall, with the insurer's
annual statement filing, file evidence of the relief with the:
(1) states in which the insurer is authorized to do business;
and
(2) National Association of Insurance Commissioners.
If a nondomestic state accepts electronic filing with the National
Association of Insurance Commissioners, the insurer shall file the
evidence of the relief in an electronic format that is acceptable to
the National Association of Insurance Commissioners.
(b) In accordance with AU Section 319 of the professional standards of the American Institute of Certified Public Accountants, an accountant conducting an audit under this chapter shall:
(1) obtain an understanding of internal control sufficient to plan the audit;
(2) for an insurer required to file a report of internal control over financial reporting under this chapter, consider the most recently available financial report under Statement on Auditing Standards No. 102 of the American Institute of Certified Public Accountants, in planning and performing the audit of the statutory financial statements; and
(3) if considered necessary by the accountant, consider the procedures in the National Association of Insurance Commissioners Financial Condition Examiners Handbook.
(1) Amounts shown on the consolidated or combined annual
audited financial report shall be shown on the schedule.
worksheet.
(2) Amounts for each insurer subject to this section shall be stated
separately.
(3) Noninsurance operations shall may be shown on the schedule
worksheet on a combined or an individual basis.
(4) Explanations of consolidating and eliminating entries shall be
included.
(5) A reconciliation shall be included of any differences between
the amounts shown in the individual insurer columns of the
schedule worksheet and comparable amounts shown on the
annual statements of the insurers.
(1) the
(2) the
The
(b) If the
accountant had been aware of the facts when writing its the
accountant's report, might have affected the independent auditor's
accountant's report that was included in the insurer's annual audited
financial report, the independent auditor accountant shall take such
action as is prescribed in the Volume 1, Section AU 561 of the
Professional Standards of the American Institute of Certified Public
Accountants.
(1) a written
(2) a written
(3) if no material weakness is noted by the accountant during the audit, a written communication noting that fact.
(b) The written
(1) That the
(2) The:
(A) general background and experience; and
(B) experience in audits of insurers;
of the staff assigned to the audit. The letter must also state whether each member of the staff is
(3) That the
(A) annual audited financial report and the accountant's opinion on the annual audited financial report will be filed with the commissioner in compliance with this chapter; and
(B) commissioner will be relying on the
(4) That the
(5) That the
(6) That the
(1) all work papers prepared in the conduct of the
(2) any
independent auditor accountant to retain the audit work papers and
communications until the department has filed a report on the
examination covering the period of the audit but not later than seven
(7) years after the date of the audit report.
(b) (c) Department examiners, in conducting a review of an
independent auditor's work papers, under this section, may make and
retain copies photocopies of the pertinent audit work papers. and
communications. A review of an independent auditor's work papers and
communications shall be under this section is considered an
investigation, and all work papers and communications obtained or
copied during the course of that the investigation are confidential
under IC 27-1-3.1-15.
(1) prepare the insurer's or insurer group's report of internal control over financial reporting as of the December 31 immediately preceding the report; and
(2) file the report prepared under subdivision (1) with the commissioner, along with the communication required under section 12 of this chapter.
(b) The commissioner may require an insurer that has any amount of annual direct written and assumed premiums to file the insurer's report of internal controls over financial reporting if the insurer:
(1) meets one (1) or more of the standards of an insurer considered to be in hazardous financial condition as determined by the commissioner according to rules adopted under IC 4-22-2; or
(2) experiences an RBC level (as defined in IC 27-1-36-18) event.
(c) An insurer or insurer group that:
(1) is subject to subsection (a) or (b);
(2) is:
(A) directly subject to Section 404;
(B) part of a holding company system whose parent is directly subject to Section 404;
(C) not directly subject to Section 404 and is a SOX compliant entity; or
(D) a member of a holding company system with a parent company that:
(i) is not directly subject to Section 404; and
(ii) is a SOX compliant entity; and
(3) includes a description of all of the insurer's or insurer group's internal controls over financial reporting that have a material impact on the preparation of the parts of the insurer's or insurer group's audited statutory financial statements described in section 7(b)(2) through 7(b)(6) and section 7(c) and 7(d) of this chapter in the insurer's or parent's Section 404 report;
may satisfy the requirement of subsection (a) or (b) by filing the insurer's, insurer group's, or parent's Section 404 report and an affirmation from the insurer's or insurer group's management personnel that all material processes with respect to the preparation of the insurer's or insurer group's audited financial statements in subdivision (3) are included with the Section 404 report.
(d) If an insurer or insurer group has internal controls over financial reporting that have a material impact on the preparation of the insurer's or insurer group's audited statutory financial statements and a description of the internal controls over financial reporting is not included in the Section 404 report that is filed by the insurer or insurer group, the insurer or insurer group may file:
(1) the insurer's or insurer group's report of internal control over financial reporting as described in subsection (a); or
(2) a Section 404 report and the insurer's or insurer group's report of internal control over financial reporting as described in subsection (a);
for the internal controls over financial reporting that are not included in the Section 404 report.
(e) An insurer's or insurer group's report of internal control over financial reporting must include the following:
(1) A statement that management personnel are responsible for establishing and maintaining adequate internal control over financial reporting.
(2) A statement that management personnel have established internal control over financial reporting accompanied by:
(A) an assertion concerning whether:
(i) after diligent inquiry by; and
(ii) to the best of the knowledge of;
the management personnel, the insurer's or insurer group's internal control over financial reporting is effective to provide reasonable assurance that the financial statements are reliable and prepared in accordance with statutory accounting principles; and
(B) a disclosure of any unremediated material weakness:
(i) in the insurer's or insurer group's internal control over financial reporting; and
(ii) identified by management personnel as of the December 31 immediately preceding the date of the report.
(3) A statement that briefly describes the approach or process by which management personnel evaluate the effectiveness of the insurer's or insurer group's internal control over financial reporting.
(4) A statement that briefly describes the scope of work that is included in the report and whether any of the insurer's or insurer group's internal controls over financial reporting are excluded from the report.
(5) A statement regarding inherent limitations of the insurer's or insurer group's internal control over financial reporting system.
(6) Signatures of the chief executive officer and the chief financial officer or individuals holding equivalent positions.
(f) An insurer's or insurer group's management personnel:
(1) shall:
(A) document; and
(B) make available upon a financial condition examination;
the basis for the assertions made under subsection (e);
(2) may partially base the assertions made under subsection (e) on review, monitoring, and testing of the insurer's or insurer group's internal control over financial reporting that is undertaken in the normal course of management activities; and
(3) shall determine the:
(A) nature of the insurer's or insurer group's internal control over financial reporting system; and
(B) nature and extent of documentation;
that are used to support the assertions made under subsection (e) in a cost effective manner, including assembly of or reference to existing documentation.
(g) For purposes of this section, if an unremediated material weakness exists in an insurer's or insurer group's internal control over financial reporting, the insurer's or insurer group's management personnel shall not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of the insurer's or insurer group's financial statements in accordance with statutory accounting principles.
(h) A report of an insurer's or insurer group's internal control over financial reporting and supporting documentation provided during a financial condition examination is confidential.
(b) Within ten (10) days after the denial of
(1) is required to file an annual audited financial report under this chapter; and
(2) fails to file an audited annual financial report before July 1 or any other deadline established by the commissioner for the insurer under this chapter without having obtained an extension;
is subject to a civil penalty
(b) Except as provided in subsections (d), (e), and (f), a domestic insurer shall comply with this chapter, as amended by amendments effective July 1, 2010, for the year ending December 31, 2010, and each subsequent year unless otherwise permitted by the commissioner.
(c) Except as provided in subsections (d), (e), and (f), a foreign or alien insurer shall comply with this chapter, as amended effective July 1, 2010, for the year ending December 31, 2010, and each year thereafter, unless otherwise permitted by the
commissioner.
(d) The requirements of section 9(e) of this chapter are in effect
for an annual audited financial report for the year ending
December 31, 2010, and each subsequent year.
(e) The requirements of section 7.2 of this chapter, as amended
effective July 1, 2010, apply beginning for the year ending
December 31, 2010. However, an insurer or insurer group that, on
December 31, 2010, is described in:
(1) section 7.2(h)(1) of this chapter and in a subsequent
calendar year is described in section 7.2(h)(2) or 7.2(h)(3) of
this chapter; or
(2) section 7.2(h)(2) of this chapter and in a subsequent
calendar year is described in section 7.2(h)(3) of this chapter;
due to a change in premium or business combination has one (1)
calendar year following the year during which the change occurs
to comply with the requirements specified in section 7.2(h) of this
chapter for percentage of independent members of the insurer's or
insurer group's audit committee.
(f) Except as provided in subsection (e), section 13.8 of this
chapter applies beginning for the year ending December 31, 2010.
However, an insurer or insurer group that, on December 31, 2010,
is not subject to section 13.8 of this chapter and in a subsequent
calendar year becomes subject to section 13.8 of this chapter due
to a change in premium or business combination shall comply with
section 13.8 of this chapter beginning two (2) calendar years
following the calendar year during which the change occurs.
(b) For a British or Canadian insurer, the letter required under section 8 of this chapter shall state that the accountant is aware of the
the proper officers of said foreign company when such officers are duly
authorized to execute same through such action on the part of the
directors, shareholders, members, or policyholders of said foreign
company as may be required by the laws of the state where the same is
incorporated; and upon execution, said articles of merger or
consolidation shall be submitted to the commissioner of insurance or
other officer at the head of the insurance department of the state where
such foreign company is incorporated. No such merger or consolidation
shall take effect until it shall have been approved by the insurance
official of the state where said foreign company is incorporated nor
until a certificate of his approval has been filed in the office of the
department of insurance of the state of Indiana. Such submission to and
approval by the proper official of such other state shall not be required
unless the same are required by the laws of such foreign state. The
domestic company involved in such merger or consolidation shall not
through anything contained in this section be relieved of any of the
procedural requirements enumerated in the preceding sections of this
article.
(b) No merger or consolidation between a domestic and a foreign
company shall take effect, unless and until the surviving or new
company, if such is a foreign company, shall file with the department
a power of attorney appointing the commissioner and his successors in
office, the attorney for service of said foreign company, upon whom all
lawful process against said company may be served. Said power of
attorney shall be irrevocable so long as said foreign company has
outstanding in this state any contract of insurance, or other obligation
whatsoever, and shall by its terms so provide. Service upon the
commissioner shall be deemed sufficient service upon the company.
complies with IC 27-1-17-4(7).
(1) Life _ insurance coverage on human lives, including benefits of endowment and annuities, that may include benefits in the event of death or dismemberment by accident and benefits for disability income.
(2) Accident and health or sickness _ insurance coverage for sickness, bodily injury, or accidental death that may include
benefits for disability income.
(3) Property _ insurance coverage for the direct or consequential
loss of or damage to property of every kind.
(4) Casualty _ insurance coverage against legal liability,
including liability for death, injury, or disability, or for damage to
real or personal property.
(5) Variable life and variable annuity products _ insurance
coverage provided under variable life insurance contracts and
variable annuities.
(6) Personal lines _ property and casualty insurance coverage
sold to individuals and families for primarily noncommercial
purposes.
(7) Credit _ limited line credit insurance.
(8) Title _ insurance coverage against loss or damage on account
of encumbrances on or defects in the title to real estate.
(9) Any other line of insurance permitted under Indiana laws or
administrative rules.
(b) A person who requests and receives qualification under
subsection (a)(5) for variable life and annuity products:
(1) is considered to have requested; and
(2) shall receive;
a life qualification under subsection (a)(1). The insurance producer's
license document must clearly indicate that the life qualification
received under this subsection includes a qualification for variable
life and variable annuity products.
(c) A resident insurance producer may not request separate
qualifications for property insurance and casualty insurance under
subsection (a).
(d) An insurance producer license remains in effect unless revoked
or suspended, as long as the renewal fee set forth in section 32 of this
chapter is paid and the educational requirements for resident individual
producers are met by the due date.
(e) An individual insurance producer who:
(1) allows the individual insurance producer's license to lapse;
and
(2) completed all required continuing education before the license
expired;
may, not more than twelve (12) months after the expiration date of the
license, reinstate the same license without the necessity of passing a
written examination. A penalty in the amount of three (3) times the
unpaid renewal fee shall be required for any renewal fee received after
the expiration date of the license. However, the department of
insurance may waive the penalty if the renewal fee is received not more
than thirty (30) days after the expiration date of the license.
(f) A licensed insurance producer who is unable to comply with
license renewal procedures due to military service or some other
extenuating circumstance may request a waiver of the license renewal
procedures. The producer may also request a waiver of any
examination requirement or any other fine or sanction imposed for
failure to comply with the license renewal procedures.
(g) An insurance producer license shall contain the licensee's name,
address, personal identification number, date of issuance, lines of
authority, expiration date, and any other information the commissioner
considers necessary.
(h) A licensee shall inform the commissioner of a change of address
not more than thirty (30) days after the change by any means
acceptable to the commissioner. The failure of a licensee to timely
inform the commissioner of a change in legal name or address shall
result in a penalty under section 12 of this chapter.
(i) To assist in the performance of the commissioner's duties, the
commissioner may contract with nongovernmental entities, including
the National Association of Insurance Commissioners (NAIC), or any
affiliates or subsidiaries that the NAIC oversees, to perform ministerial
functions, including the collection of fees related to producer licensing,
that the commissioner and the nongovernmental entity consider
appropriate.
(j) The commissioner may participate, in whole or in part, with the
NAIC or any affiliate or subsidiary of the NAIC in a centralized
insurance producer license registry through which insurance producer
licenses are centrally or simultaneously effected for states that require
an insurance producer license and participate in the centralized
insurance producer license registry. If the commissioner determines
that participation in the centralized insurance producer license registry
is in the public interest, the commissioner may adopt rules under
IC 4-22-2 specifying uniform standards and procedures that are
necessary for participation in the registry, including standards and
procedures for centralized license fee collection.
(1) the individual is currently licensed in the other state; or
(2) the application is received within ninety (90) days after the cancellation of the applicant's previous license and:
(A) the other state issues a certification that, at the time of cancellation, the applicant was in good standing in that state; or
(B) the state's Producer Database records that are maintained by the National Association of Insurance Commissioners, its affiliates, or its subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested.
(b) If a person is licensed as an insurance producer in another state and moves to Indiana, the person, to be authorized to act as an insurance producer in Indiana, must make application to become a resident licensee under section 6 of this chapter within ninety (90) days after establishing legal residence in Indiana. However, the person is not required to take prelicensing education or examination to obtain a license for any line of authority for which the person held a license in the other state unless the commissioner determines otherwise by rule.
(c) An individual who:
(1) has attained the designation of chartered life underwriter, certified financial planner,
(2) applies for an insurance producer license in Indiana requesting qualification under sections:
(A) 7(a)(1);
(B) 7(a)(2); or
(C) 7(a)(5);
of this chapter;
is not required to complete prelicensing education and is required to take only the portion of the examination required under section 5(b) of this chapter that pertains to Indiana laws and rules.
(d) An individual who:
(1) has attained the designation of chartered property and casualty underwriter, certified insurance counselor,
(2) applies for an insurance producer license in Indiana requesting qualification under sections:
(A) 7(a)(3);
(B) 7(a)(4); or
(C) 7(a)(6);
of this chapter;
is not required to complete prelicensing education and is required to take only the portion of the examination required under section 5(b) of this chapter that pertains to Indiana laws and rules.
(e) An individual who:
(1) has attained a bachelor's degree in insurance; and
(2) applies for an insurance producer license in Indiana requesting qualification under section 7(a)(1) through 7(a)(6) of this chapter;
is not required to complete prelicensing education and is required to take only the part of the examination required under section 5(b) of this chapter that pertains to Indiana laws and rules.
(1) the producer's license shall never be reinstated; and
(2) the former licensee, after the license revocation, is not eligible to submit an application for a license to the department.
(b) The commissioner may reprimand, levy a civil penalty, place an insurance producer on probation, suspend an insurance producer's license, revoke an insurance producer's license for a period of years, permanently revoke an insurance producer's license, or refuse to issue or renew an insurance producer license, or take any combination of these actions, for any of the following causes:
(1) Providing incorrect, misleading, incomplete, or materially untrue information in a license application.
(2) Violating:
(A) an insurance law;
(B) a regulation;
(C) a subpoena of an insurance commissioner; or
(D) an order of an insurance commissioner;
of Indiana or of another state.
(3) Obtaining or attempting to obtain a license through misrepresentation or fraud.
(4) Improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business.
(5) Intentionally misrepresenting the terms of an actual or
proposed insurance contract or application for insurance.
(6) Having been convicted of a felony.
(7) Admitting to having committed or being found to have
committed any unfair trade practice or fraud in the business of
insurance.
(8) Using fraudulent, coercive, or dishonest practices, or
demonstrating incompetence, untrustworthiness, or financial
irresponsibility in the conduct of business in Indiana or elsewhere.
(9) Having an insurance producer license, or its equivalent,
denied, suspended, or revoked in any other state, province,
district, or territory.
(10) Forging another's name to an application for insurance or to
any document related to an insurance transaction.
(11) Improperly using notes or any other reference material to
complete an examination for an insurance license.
(12) Knowingly accepting insurance business from an individual
who is not licensed.
(13) Failing to comply with an administrative or court order
imposing a child support obligation.
(14) Failing to pay state income tax or to comply with any
administrative or court order directing payment of state income
tax.
(15) Failing to satisfy the continuing education requirements
established by IC 27-1-15.7.
(16) Violating section 31 of this chapter.
(17) Failing to timely inform the commissioner of a change in
legal name or address, in violation of section 7(h) of this chapter.
(c) The commissioner shall refuse to:
(1) issue a license; or
(2) renew a license issued;
under this chapter to any person who is the subject of an order issued
by a court under IC 31-14-12-7 or IC 31-16-12-10 (or
IC 31-1-11.5-13(m) or IC 31-6-6.1-16(m) before their repeal).
(d) If the commissioner refuses to renew a license or denies an
application for a license, the commissioner shall notify the applicant or
licensee and advise the applicant or licensee, in a writing sent through
regular first class mail, of the reason for the denial of the applicant's
application or the nonrenewal of the licensee's license. The applicant
or licensee may, not more than sixty-three (63) days after notice of
denial of the applicant's application or nonrenewal of the licensee's
license is mailed, make written demand to the commissioner for a
hearing before the commissioner to determine the reasonableness of the
commissioner's action. The hearing shall be held not more than thirty
(30) days after the applicant or licensee makes the written demand, and
shall be conducted under IC 4-21.5.
(e) The license of a business entity may be suspended, revoked, or
refused if the commissioner finds, after hearing, that a violation of an
individual licensee acting on behalf of the partnership or corporation
was known or should have been known by one (1) or more of the
partners, officers, or managers of the partnership or corporation and:
(1) the violation was not reported to the commissioner; and
(2) no corrective action was taken.
(f) In addition to or in lieu of any applicable denial, suspension, or
revocation of a license under subsection (b), a person may, after a
hearing, be subject to the imposition by the commissioner under
subsection (b) of a civil penalty of not less than fifty dollars ($50) and
not more than ten thousand dollars ($10,000). A penalty imposed under
this subsection may be enforced in the same manner as a civil
judgement.
(g) A licensed insurance producer or limited lines producer shall,
not more than ten (10) days after the producer receives a request in a
registered or certified letter from the commissioner, furnish the
commissioner with a full and complete report listing each insurer with
which the licensee has held an appointment during the year preceding
the request.
(h) If a licensee fails to provide the report requested under
subsection (g) not more than ten (10) days after the licensee receives
the request, the commissioner may, in the commissioner's sole
discretion, without a hearing, and in addition to any other sanctions
allowed by law, suspend any insurance license held by the licensee
pending receipt of the appointment report.
(i) The commissioner shall promptly notify all appointing insurers
and the licensee regarding any suspension, revocation, or termination
of a license by the commissioner under this section.
(j) The commissioner may not grant, renew, continue, or permit to
continue any license if the commissioner finds that the license is being
used or will be used by the applicant or licensee for the purpose of
writing controlled business. As used in this subsection, "controlled
business" means:
(1) insurance written on the interests of:
(A) the applicant or licensee;
(B) the applicant's or licensee's immediate family; or
(C) the applicant's or licensee's employer; or
(2) insurance covering:
(A) the applicant or licensee;
(B) members of the applicant's or licensee's immediate family; or
(C) either:
(i) a corporation, limited liability company, association, or partnership; or
(ii) the officers, directors, substantial stockholders, partners, members, managers, employees of such a corporation, limited liability company, association, or partnership;
of which the applicant or licensee or a member of the applicant's or licensee's immediate family is an officer, director, substantial stockholder, partner, member, manager, associate, or employee.
However, this section does not apply to insurance written or interests insured in connection with or arising out of credit transactions. A license is considered to have been used or intended to be used for the purpose of writing controlled business if the commissioner finds that during any twelve (12) month period the aggregate commissions earned from the controlled business exceeded twenty-five percent (25%) of the aggregate commission earned on all business written by the applicant or licensee during the same period.
(k) The commissioner has the authority to:
(1) enforce the provisions of; and
(2) impose any penalty or remedy authorized by;
this chapter or any other provision of this title against any person who is under investigation for or charged with a violation of this chapter or any other provision of this title, even if the person's license or registration has been surrendered or has lapsed by operation of law.
(l) For purposes of this section, the violation of any provision of IC 28 concerning the sale of a life insurance policy or an annuity contract shall be considered a violation described in subsection (b)(2).
(m) The commissioner may order a licensee to make restitution if the commissioner finds that the licensee has committed a violation described in:
(1) subsection (b)(4);
(2) subsection (b)(7);
(3) subsection (b)(8); or
(4) subsection (b)(16).
(n) The commissioner shall notify the securities commissioner appointed under IC 23-19-6-1(a) when an administrative action or civil proceeding is filed under this section and when an order is issued under this section denying, suspending, or revoking a license.
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 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 that are related to the business of insurance.
(b) 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
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) Before July 1, 2011, an insurance producer who:
(A) is at least seventy (70) years of age; and
(B) has been a licensed insurance producer continuously for at least twenty (20) years immediately preceding the license renewal date.
(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
(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) hours in a renewal period, equal to the number of hours for which
the course is approved.
(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
(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
(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
(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) a minimum number of hours of instruction,
determined by the commissioner, 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 number of
twenty-four (24) hours of instruction, determined by the
commissioner, 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) a
minimum number of hours of instruction, determined by the
commissioner, 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).
(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) The commissioner may, after notice and opportunity for a
hearing, 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.
(g) Current course materials for a prelicensing course of study that
is certified under this section must be submitted to the commissioner
upon request, but not less frequently than once every three (3) years.
(1) A copy of its articles of incorporation or association, with all
amendments thereto, duly authenticated by the proper officer of
the state, country, province, or government wherein it is
incorporated or organized, or the state in which it is domiciled in
the United States.
(2) An application for admission, executed in the manner
provided in this chapter, setting forth:
(A) the name of such company;
(B) the location of its principal office or place of business
without this state;
(C) the names of the states in which it has been admitted or
qualified to do business;
(D) the character of insurance business under its articles of
incorporation or association which it intends to transact in this
state, which must conform to the class or classes set forth in
the provisions of IC 27-1-5-1;
(E) the total authorized capital stock of the company and the
amount thereof issued and outstanding, and the surplus
required of such company by the laws of the state, country,
province, or government under which it is organized, or the
state in which it is domiciled in the United States, if a stock
company, which shall equal at least the requirements set forth
in section 5(a) of this chapter;
(F) the total amount of assets and the surplus of assets over all
its liabilities, if other than a stock company, which shall equal
at least the requirements set forth in section 5(b) of this
chapter;
(G) if an alien company, the surplus of assets invested
according to the laws of the state in the United States where it
has its deposit, which shall equal at least the requirements set
forth in section 5(c) of this chapter; and
(H) such further and additional information as the department
may from time to time require.
The application shall be signed, in duplicate in the form
prescribed by the department, by the president or a vice president
and the secretary or an assistant secretary of the corporation, and
verified under oath by the officers signing the same.
(3) A statement of its financial condition and business, in the form
prescribed by law for annual statements, signed and sworn to by
the president or secretary or other principal officers of the
company; provided, however, that an alien company shall also
furnish a separate statement comprising only its condition and
business in the United States, which shall be signed and sworn to
by its United States manager.
(4) A copy of the last report of examination certified to by the
insurance commissioner or other proper supervisory official of the
state in which such company is domiciled; provided, however,
that the commissioner may cause an examination to be made of
the condition and affairs of such company before authority to
transact business in this state is given.
(5) A certificate from the proper official of the state, country,
province, or government wherein it is incorporated or organized,
or the state in which it is domiciled in the United States, that it is
duly organized or incorporated under those laws and authorized
to make the kind or kinds of insurance which it proposes to make
in this state.
(6) A copy of its bylaws or regulations, if any, certified to by the
secretary or similar officer of the insurance company.
(7) A duly executed power of attorney in a form prescribed by the
department which constitutes and appoints an individual or a
corporate resident of Indiana, or an authorized Indiana insurer, as
the insurance company's agent, its true and lawful attorney upon
whom, except as provided in section 4.2 of this chapter, all lawful
processes in any action in law or in equity against it shall be
served. Such power of attorney shall contain an agreement by the
insurance company that any lawful process against it which may
be served upon the agent as its attorney shall be of the same force
and validity as if served upon the insurance company and that
such power of attorney shall continue in force and be irrevocable
so long as any liability of the insurance company remains
outstanding in this state. Such power of attorney shall be executed
by the president and secretary of the insurance company or other
duly authorized officers under its seal and shall be accompanied
by a certified copy of the resolution of the board of directors of
the company making said appointment and authorizing the
execution of said power of attorney. Service of any lawful process
shall be by delivering to and leaving with the agent two (2) copies
of such process, with copy of the pertinent complaint attached.
The agent shall forthwith transmit to the defendant company at its
last known principal place of business by registered or certified
mail, return receipt requested, one (1) of the copies of such
process, with complaint attached, the other copy to be retained in
a record which shall show all process served upon and transmitted
by him. Such service shall be sufficient provided the returned
receipt or, if the defendant company shall refuse to accept such
mailing, the registered mail together with an affidavit of plaintiff
or his attorney stating that service was made upon the agent and
forwarded as above set forth but that such mail was returned by
the post office department is filed with the court. The agent shall
make information and receipts available to plaintiff, defendant, or
their attorneys. No plaintiff or complainant shall be entitled to a
judgment by default based on service authorized by this section
until the expiration of at least thirty (30) days from the date on
which either the post office receipt or the unclaimed mail together
with affidavit is filed with the court. Nothing in this section shall
limit or abridge the right to serve any process, notice, or demand
upon any company in any other manner permitted by law.
(8) Proof which satisfies the department that it has complied with
the financial requirements imposed in this chapter upon foreign
and alien insurance companies which transact business in this
state and that it is entitled to public confidence and that its
admission to transact business in this state will not be prejudicial
to public interest.
(b) Whenever a foreign or alien corporation desires to procure such amended certificate, it shall present to the department at its office, accompanied by the fees prescribed by law, an application for an amended certificate of authority, setting forth the change desired in the kind or kinds of insurance business under its articles of incorporation or association which it intends to thereafter carry on in this state; the application shall be filed
(c) Upon the presentation of such application, accompanied by the corporation's certificate of authority, the department, if it
when all fees required by law shall have been paid, shall file one (1)
copy of the application in its office, cancel the certificate of authority
presented with the application, and issue to the corporation a new
certificate of authority, which certificate shall set forth the kind or
kinds of business that the corporation is authorized thereafter to
transact in this state, which shall be accompanied by one (1) copy of
the application bearing the endorsement of the approval of the
department.
(d) Upon the issuance of the new certificate of authority by the
department, the corporation therein named shall have authority
thereafter to transact in this state the kind or kinds of insurance
business set forth in such certificate, subject to the terms and
conditions prescribed in this article.
"Broker dealer" means an entity that:
(1) is registered with and subject to the jurisdiction of the Securities and Exchange Commission;
(2) maintains membership in the Securities Investor Protection Corporation; and
(3) has a tangible net worth of at least two hundred fifty million dollars ($250,000,000).
"Clearing corporation" means a corporation as defined in IC 26-1-8.1-102 except that with respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein. "Clearing corporation" may include a corporation organized or existing under the laws of any foreign country and which is legally qualified under such laws to effect transactions in securities by computerized book entry.
"Direct participant" means a bank, trust company, or safety deposit company approved by the commissioner which maintains an account in its name in a clearing corporation and through which an insurance company participates in a clearing corporation.
"Federal Reserve book-entry system" means the computerized systems sponsored by the United States Department of the Treasury and certain agencies and instrumentalities of the United States for holding and transferring securities of the United States government and such agencies and instrumentalities, respectively, in Federal Reserve Banks through banks which are members of the Federal Reserve
System, or which otherwise have access to such computerized systems.
"Member bank" means a national bank, state bank, or trust company
which is a member of the Federal Reserve System and through which
an insurance company participates in the Federal Reserve book-entry
system.
"Securities" means instruments as defined in IC 26-1-8.1-102.
(b) Notwithstanding any other provision of law, a domestic
insurance company may deposit or arrange for the safekeeping of
securities held in or purchased for its general account and its separate
accounts in a clearing corporation or the Federal Reserve book-entry
system. When securities are deposited with a clearing corporation,
certificates representing securities of the same class of the same issuer
may be merged and held in bulk in the name of the nominee of such
clearing corporation with any other securities deposited with such
clearing corporation by any person, regardless of the ownership of such
securities, and certificates representing securities of small
denominations may be merged into one (1) or more certificates of
larger denominations. The records of any member bank or broker
dealer through which an insurance company holds securities in the
Federal Reserve book-entry system, and the records of any custodian
through which an insurance company holds securities in a clearing
corporation, shall at all times show that such securities are held for
such insurance company and for which accounts thereof. Ownership of,
and other interests in, such securities may be transferred by
bookkeeping entry on the books of such clearing corporation or in the
Federal Reserve book-entry system without, in either case, physical
delivery of certificates representing such securities.
(c) Any Indiana law requiring an insurance company operating
under the laws of Indiana to deposit assets with the department shall be
deemed complied with if such deposit is made pursuant to a written
agreement between the insurance company and any bank, trust
company or a safety deposit company and approved by the
commissioner which limits withdrawals to those sanctioned and
approved by the department. Deposits so made shall be credited by the
department as deposits in its possession on the basis of the insurance
company's affidavit describing such deposits as to amount and nature.
(d) Notwithstanding any other provisions of law, securities eligible
for deposit under the insurance law of this state relating to deposit of
securities by an insurance company as a condition of commencing or
continuing to do an insurance business in this state may be deposited
with a clearing corporation or held in the Federal Reserve book-entry
system. Securities deposited with a clearing corporation or held in the
Federal Reserve book-entry system and used to meet the deposit
requirements under the insurance laws of this state shall be under the
control of the commissioner and shall not be withdrawn by the
insurance company without the approval of the commissioner. Any
insurance company holding such securities in such manner shall
provide to the commissioner evidence issued by its custodian or a
member bank through which such insurance company has deposited
securities with a clearing corporation or held in the Federal Reserve
book-entry system, respectively, in order to establish that the securities
are actually recorded in an account in the name of the custodian or
other direct participant or member bank and evidence that the records
of the custodian, other participant, or member bank reflect that such
securities are held subject to the order of the commissioner.
(e) The commissioner of insurance is authorized to promulgate rules
and regulations governing the deposit by insurance companies of
securities with clearing corporations and in the Federal Reserve
book-entry system.
(1) The terms shall be fair and reasonable.
(2) The charges or fees for services performed shall be reasonable.
(3) The expenses incurred for any payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied.
(4) The books, accounts, and records of each party as to all transactions described in this subsection shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including accounting information necessary to support the reasonableness of the charges or fees to the respective parties.
(5) The insurer's surplus as regards policyholders following any transactions with affiliates or shareholder dividend shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.
(b) The following transactions involving a domestic insurer and any person in its insurance holding company system 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 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, and 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.
(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 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).
(a) "Administrator"
(1) An employer or a wholly owned direct or indirect subsidiary of an employer acting on behalf of the employees of:
(A) the employer;
(B) the subsidiary; or
(C) an affiliated corporation of the employer.
(2) A union acting for its members.
(3) An insurer.
(4) An insurance producer:
(A) that is licensed under IC 27-1-15.6;
(B) that has:
(i) a life; or
(ii) an accident and health or sickness;
qualification under IC 27-1-15.6-7; and
(C) whose activities are limited exclusively to the sale of insurance.
(5) A creditor acting for its debtors regarding insurance covering a debt between them.
(6) A trust established under 29 U.S.C. 186 and the trustees, agents, and employees acting pursuant to that trust.
(7) A trust that is exempt from taxation under Section 501(a) of the Internal Revenue Code and:
(A) the trustees and employees acting pursuant to that trust; or
(B) a custodian and the agents and employees of the custodian acting pursuant to a custodian account that meets the requirements of Section 401(f) of the Internal Revenue Code.
(8) A financial institution that is subject to supervision or examination by federal or state banking authorities to the extent that the financial institution collects and remits premiums to an insurance producer or an authorized insurer in connection with a loan payment.
(9) A credit card issuing company that:
(A) advances for; and
(B) collects from, when a credit card holder authorizes the collection;
credit card holders of the credit card issuing company, insurance premiums or charges.
(10) A person that adjusts or settles claims in the normal course of the person's practice or employment as an attorney at law and that does not collect charges or premiums in connection with life, annuity, or health coverage.
(11) A health maintenance organization that has a certificate of authority issued under IC 27-13.
(12) A limited service health maintenance organization that has a certificate of authority issued under IC 27-13.
(13) A mortgage lender to the extent that the mortgage lender collects and remits premiums to an insurance producer or an
authorized insurer in connection with a loan payment.
(14) A person that:
(A) is licensed as a managing general agent as required under
IC 27-1-33; and
(B) acts exclusively within the scope of activities provided for
under the license referred to in clause (A).
(15) A person that:
(A) directly or indirectly underwrites, collects charges or
premiums from, or adjusts or settles claims on residents of
Indiana in connection with life, annuity, or health coverage
provided by an insurer;
(B) is affiliated with the insurer; and
(C) performs the duties specified in clause (A) only according
to a contract between the person and the insurer for the direct
and assumed life, annuity, or health coverage provided by the
insurer.
(b) "Affiliate" means an entity or a person that:
(1) directly or indirectly through an intermediary controls or is
controlled by; or
(2) is under common control with;
a specified entity or person.
(c) "Church plan" has the meaning set forth in IC 27-8-10-1.
(d) "Commissioner" refers to the insurance commissioner appointed
under IC 27-1-1-2.
(e) "Control" means the direct or indirect possession of the power
to direct or cause the direction of the management and policies of a
person, whether:
(1) through ownership of voting securities;
(2) by contract other than a commercial contract for goods or
nonmanagement services; or
(3) otherwise;
unless the power is the result of an official position with the person or
a corporate office held by the person. Control is presumed to exist if a
person directly or indirectly owns, controls, holds with the power to
vote, or holds proxies representing not less than ten percent (10%) of
the voting securities of another person.
(f) "Covered individual" means an individual who is covered under
a benefit program provided by an insurer.
(g) "Financial institution" means a bank, savings association, credit
union, or any other institution regulated under IC 28 or federal law.
(h) "GAAP" refers to consistently applied United States generally
accepted accounting principles.
(i) "Governmental plan" has the meaning set forth in IC 27-8-10-1.
(j) "Home state" means the District of Columbia or any state or territory of the United States in which an administrator is incorporated or maintains the administrator's principal place of business. If the place in which the administrator is incorporated or maintains the administrator's principal place of business is not governed by a law that is substantially similar to this chapter, the administrator's home state is another state:
(1) in which the administrator conducts the business of the administrator; and
(2) that the administrator declares is the administrator's home state.
(k) "Insurance producer" has the meaning set forth in IC 27-1-15.6-2.
(l) "Insurer" means:
(1) a person who obtains a certificate of authority under:
(A) IC 27-1-3-20;
(B) IC 27-13-3; or
(C) IC 27-13-34; or
(2) an employer that provides life, health, or annuity coverage in Indiana under a governmental plan or a church plan.
(m) "NAIC" refers to the National Association of Insurance Commissioners.
(n) "Negotiate" has the meaning set forth in IC 27-1-15.6-2.
(o) "Nonresident administrator" means a person that applies for or holds a license under section 12.2 of this chapter.
(p) "Person" has the meaning set forth in IC 27-1-15.6-2.
(q) "Sell" has the meaning set forth in IC 27-1-15.6-2.
(r) "Solicit" has the meaning set forth in IC 27-1-15.6-2.
(s) "Underwrite" refers to the:
(1) acceptance of a group application or an individual application for coverage of an individual in accordance with the written rules of the insurer; or
(2) planning and coordination of a benefit program provided by an insurer.
(t) "Uniform application" means the current version of the NAIC uniform application for third party administrators.
(1) apply to act as an administrator in Indiana upon the uniform application;
(2) pay an application fee in an amount determined by the commissioner; and
before performing the function of an administrator in Indiana. The commissioner shall deposit a fee paid under subdivision (2) into the department of insurance fund established by IC 27-1-3-28.
(b) The uniform application must include or be accompanied by the following:
(1) Basic organizational documents of the applicant, including:
(A) articles of incorporation;
(B) articles of association;
(C) partnership agreement;
(D) trade name certificate;
(E) trust agreement;
(F) shareholder agreement;
(G) other applicable documents; and
(H) amendments to the documents specified in clauses (A) through (G).
(2) Bylaws, rules, regulations, or other documents that regulate the internal affairs of the applicant.
(3) The NAIC biographical affidavits for individuals who are responsible for the conduct of affairs of the applicant, including:
(A) members of the applicant's:
(i) board of directors;
(ii) board of trustees;
(iii) executive committee; or
(iv) other governing board or committee;
(B) principal officers, if the applicant is a corporation;
(C) partners or members, if the applicant is:
(i) a partnership;
(ii) an association; or
(iii) a limited liability company;
(D) shareholders or members that hold, directly or indirectly, at least ten percent (10%) of the:
(i) voting stock;
(ii) voting securities; or
(iii) voting interest;
of the applicant; and
(E) any other person who exercises control or influence over the affairs of the applicant.
(4) Financial information reflecting a positive net worth, including:
(A) audited annual financial statements prepared by an independent certified public accountant for the two (2) most recent fiscal years; or
(B) if the applicant has been in business for less than two (2) fiscal years, financial statements or reports that are:
(i) prepared in accordance with GAAP; and
(ii) certified by an officer of the applicant;
for any completed fiscal years and for any month during the current fiscal year for which financial statements or reports have been completed.
If an audited financial statement or report required under clause (A) or (B) is prepared on a consolidated basis, the statement or report must include a columnar consolidating or combining worksheet that includes the amounts shown on the consolidated audited financial statement or report, separately reported on the worksheet for each entity included on the statement or report, and an explanation of consolidating and eliminating entries.
(5) Information determined by the commissioner to be necessary for a review of the current financial condition of the applicant.
(6) A description of the business plan of the applicant, including:
(A) information on staffing levels and activities proposed in Indiana and nationwide; and
(B) details concerning the applicant's ability to provide a sufficient number of experienced and qualified personnel for:
(i) claims processing;
(ii) record keeping; and
(iii) underwriting.
(7) Any other information required by the commissioner.
(c) An administrator that applies for licensure under this section shall make copies of written agreements with insurers available for inspection by the commissioner.
(d) An administrator that applies for licensure under this section shall:
(1) produce the administrator's accounts, records, and files for examination; and
(2) make the administrator's officers available to provide information concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(e) The commissioner may refuse to issue a license under this section if the commissioner determines that:
(1) the administrator or an individual who is responsible for the conduct of the affairs of the administrator:
(A) is not:
(i) competent;
(ii) trustworthy;
(iii) financially responsible; or
(iv) of good personal and business reputation; or
(B) has had an:
(i) insurance certificate of authority or insurance license; or
(ii) administrator certificate of authority or administrator license;
denied or revoked for cause by any jurisdiction;
(2) the financial information provided under subsection (b)(4) does not reflect that the applicant has a positive net worth; or
(3) any of the grounds set forth in section 12.4 of this chapter exists with respect to the administrator.
(f) An administrator that applies for a license under this section shall immediately notify the commissioner of a material change in:
(1) the ownership or control of the administrator; or
(2) another fact or circumstance that affects the administrator's qualification for a license.
The commissioner, upon receiving notice under this subsection, shall report the change to an electronic data base maintained by the NAIC or an affiliate or a subsidiary of the NAIC.
(g) An administrator that applies for a license under this section and will administer a governmental plan or a church plan shall obtain a bond as required under section 4(g) of this chapter.
(h) A license that is issued under this section is valid:
(1) for one (1) year after the date of issuance; or
(2) until:
whichever occurs first.
(1) performs the duties of an administrator in Indiana; and
(2) does not hold a license issued under section 11.1 of this chapter;
shall obtain a nonresident administrator license under this section by
filing a uniform application, accompanied by an application fee in an
amount determined by the commissioner, with the commissioner.
The commissioner shall deposit a fee paid under this subsection
into the department of insurance fund established by IC 27-1-3-28.
(b) Unless the commissioner verifies the nonresident administrator's
home state license status through an electronic data base maintained by
the NAIC or by an affiliate or a subsidiary of the NAIC, a uniform
application filed under subsection (a) must be accompanied by a letter
of certification from the nonresident administrator's home state,
verifying that the nonresident administrator holds a resident
administrator license in the home state.
(c) A nonresident administrator is not eligible for a nonresident
administrator license under this section unless the nonresident
administrator is licensed as a resident administrator in a home state that
has a law or regulation that is substantially similar to this chapter.
(d) Except as provided in subsections (b) and (h), the commissioner
shall issue a nonresident administrator license to a nonresident
administrator that makes a filing under subsections (a) and (b) upon
receipt of the filing.
(e) Unless a nonresident administrator is notified by the
commissioner that the commissioner is able to verify the nonresident
administrator's home state licensure through an electronic data base
described in subsection (b), the nonresident administrator shall:
(1) on September 15 of each year, file a renewal application and
a statement with the commissioner affirming that the nonresident
administrator maintains a current license in the nonresident
administrator's home state; and
(2) pay to the commissioner a filing fee as required in an
amount determined by the commissioner.
The commissioner shall collect deposit a filing fee required paid under
subdivision (2) and deposit the fee into the department of insurance
fund established by IC 27-1-3-28.
(f) A nonresident administrator that applies for licensure under this
section shall:
(1) produce the accounts of the nonresident administrator;
(2) produce the records and files of the nonresident administrator
for examination; and
(3) make the officers of the nonresident administrator available to
provide information with respect to the affairs of the nonresident
administrator;
when reasonably required by the commissioner.
(g) A nonresident administrator is not required to hold a nonresident
administrator license in Indiana if the nonresident administrator's
function in Indiana is limited to the administration of life, health, or
annuity coverage for a total of not more than one hundred (100) Indiana
residents.
(h) The commissioner may refuse to issue or may delay the issuance
of a nonresident administrator license if the commissioner determines
that:
(1) due to events occurring; or
(2) based on information obtained;
after the nonresident administrator's home state's licensure of the
nonresident administrator, the nonresident administrator is unable to
comply with this chapter or grounds exist for the home state's
revocation or suspension of the nonresident administrator's home state
license.
(i) If the commissioner makes a determination described in
subsection (h), the commissioner:
(1) shall provide written notice of the determination to the
insurance regulator of the nonresident administrator's home state;
and
(2) may delay the issuance of a nonresident administrator license
to the nonresident administrator until the commissioner
determines that the nonresident administrator is able to comply
with this chapter and that grounds do not exist for the home state's
revocation or suspension of the nonresident administrator's home
state license.
(1) The report must contain financial information reflecting a positive net worth prepared in accordance with section 11.1(b)(4) of this chapter.
(2) The report must be in the form and contain matters prescribed by the commissioner.
(3) The report must be verified by at least two (2) officers of the administrator.
(4) The report must include the complete names and addresses of insurers with which the administrator had a written agreement during the preceding fiscal year.
(5) The report must be accompanied by a filing fee in an amount determined by the commissioner.
The commissioner shall collect a filing fee paid under subdivision (5) and deposit the fee into the department of insurance fund established by IC 27-1-3-28.
(b) The commissioner shall review a report filed under subsection (a) not later than September 1 of the year in which the report is filed. Upon completion of the review, the commissioner shall:
(1) issue a certification to the administrator:
(A) indicating that:
(i) the financial statement reflects a positive net worth; and
(ii) the administrator is currently licensed and in good standing; or
(B) noting deficiencies found in the report; or
(2) update an electronic data base that is maintained by the NAIC or by an affiliate or a subsidiary of the NAIC:
(A) indicating that the administrator is solvent and in compliance with this chapter; or
(B) noting deficiencies found in the report.
(1) The lawful transaction of surplus lines insurance.
(2) The lawful transaction of reinsurance by insurers.
(3) Transactions in this state involving a policy lawfully solicited, written, and delivered outside of this state covering only subjects of insurance not resident, located, or expressly to be performed in this state at the time of issuance, and which transactions are subsequent to the issuance of such policy.
(4) Attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses.
(5) Transactions in this state involving group life and group sickness and accident or blanket sickness and accident insurance or group annuities where the master policy of such groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business, to a group organized for purposes other than the procurement of insurance, and where the policyholder is domiciled or otherwise has a bona fide situs.
(6) Transactions in this state relative to a policy issued or to be
issued outside this state involving insurance on vessels, craft or
hulls, cargos, marine builder's risk, marine protection and
indemnity or other risk, including strikes and war risks commonly
insured under ocean or wet marine forms of policy.
(7) Transactions in this state involving life insurance, health
insurance, or annuities provided to religious or charitable
institutions organized and operated without profit to any private
shareholder or individual for the benefit of such institutions and
individuals engaged in the service of such institutions.
(8) Transactions in this state involving contracts of insurance not
readily obtainable in the ordinary insurance market and issued to
one (1) or more industrial insureds. For purposes of this section,
an "industrial insured" means an insured:
(A) who procures the insurance of any risk or risks by use of
the services of a full-time employee acting as an insurance
manager or buyer or the services of a regularly retained and
continuously qualified insurance consultant;
(B) whose aggregate annual premium for insurance on all risks
totals at least twenty-five thousand dollars ($25,000); and
(C) who has at least twenty-five (25) full-time employees;
(D) who, on or before February 1 (for the preceding six (6)
month period ending December 31) and August 1 (for the
preceding six (6) month period ending June 30) of each
year, remits to the department an amount equal to two and
one-half percent (2.5%) of all gross premiums upon all
policies and contracts procured by the insured under this
section, plus:
(i) ten percent (10%) of the amount due for the first
month after the date specified in this clause during which
the amount described in this clause is not remitted in
compliance with this clause; and
(ii) an additional one percent (1%) of the amount due for
each additional month during which the amount due
under this clause is unpaid; and
(E) who files with the department, with the amount
remitted under clause (D), an affidavit specifying all
transactions undertaken and policies and contracts
procured during the preceding calendar year, including
the following:
(i) The description and location of the insured property
or risk and the name of the insured.
(ii) The gross premiums charged for the policy or
contract.
(iii) The name and home office address of the insurer
that issues the policy or contract and the kind of
insurance effected.
(iv) A statement that the insured, after diligent effort,
was unable to procure from any insurer authorized to
transact the particular kind of insurance business in
Indiana the full amount of insurance coverage required
to protect the insured.
(9) Transactions in Indiana involving the rendering of any service
by any ambulance service provider and all fees, costs, and
membership payments charged for the service. To qualify under
this subdivision, the ambulance service provider:
(A) must have its ambulance service program approved by an
ordinance of the legislative body of the county or city in which
it operates; and
(B) may not offer any membership program that includes
benefits exceeding one (1) year in duration.
(b) Any of the following acts in this state effected by mail or
otherwise by or on behalf of an unauthorized insurer constitutes the
transaction of an insurance business in this state. The venue of an act
committed by mail is at the point where the matter transmitted by mail
is delivered and takes effect. Unless otherwise indicated, the term
"insurer" as used in this section includes all persons engaged as
principals in the business of insurance and also includes interinsurance
exchanges and mutual benefit societies.
(1) The making of or proposing to make, as an insurer, an
insurance contract.
(2) The making of or proposing to make, as guarantor or surety,
any contract of guaranty or suretyship as a vocation and not
merely incidental to any other legitimate business or activity of
the guarantor or surety.
(3) The taking or receiving of any application for insurance.
(4) The receiving or collection of any premium, commission,
membership fees, assessments, dues, or other consideration for
any insurance or any part thereof.
(5) The issuance or delivery of contracts of insurance to residents
of this state or to persons authorized to do business in this state.
(6) Acting as an agent for or otherwise representing or aiding on
behalf of another person or insurer in the solicitation, negotiation,
procurement, or effectuation of insurance or renewals thereof or
in the dissemination of information as to coverage or rates, or
forwarding of applications, or delivery of policies or contracts, or
inspection of risks, a fixing of rates or investigation or adjustment
of claims or losses or in the transaction of matters subsequent to
effectuation of the contract and arising out of it, or representing
or assisting a person or an insurer in the transaction of insurance
with respect to subjects of insurance resident, located, or to be
performed in this state. This subdivision does not prohibit
full-time salaried employees of a corporate insured from acting in
the capacity of an insurance manager or buyer in placing
insurance in behalf of the employer.
(c)(1) The failure of an insurer transacting insurance business in this
state to obtain a certificate of authority does not impair the validity of
any act or contract of such insurer and does not prevent such insurer
from defending any action at law or suit in equity in any court of this
state, but no insurer transacting insurance business in this state without
a certificate of authority may maintain an action in any court of this
state to enforce any right, claim, or demand arising out of the
transaction of such business until such insurer obtains a certificate of
authority.
(2) In the event of failure of any such unauthorized insurer to pay
any claim or loss within the provisions of such insurance contract, any
person who assisted or in any manner aided directly or indirectly in the
procurement of such insurance contract is liable to the insured for the
full amount of the claim or loss in the manner provided by the
insurance contract.
(1) among its purposes the insuring against loss or damage on account of encumbrances upon or defects in the title to real estate; and
(2) a physical office in Indiana;
is hereby authorized to organize under IC 23-1, and any foreign corporation, having among its purposes the insuring against loss or damage on account of encumbrances upon or defects in the title to real estate, is hereby authorized to and may be admitted to do business in this state under IC 23-1. Any domestic or foreign corporation, organized or admitted to do business before or after June 7, 1937, as provided in this section, may engage in business as a title insurance company by complying with the provisions of this chapter.
(b) A domestic corporation admitted to do business as described in subsection (a) shall provide written notice to the department of
insurance and all policyholders of a change in location of the
domestic corporation's physical office in Indiana, including the
address and telephone number of the new location.
(1) IC 27-1-7-11.
(2) IC 27-1-6-21.
(3) IC 27-9.
(b) A foreign corporation admitted to do business as described in section 3 of this chapter is subject to IC 27-1-17-9.
(b) Except as provided in subsection (c), (d), or (e), a certificate may not be issued to a resident of Indiana pursuant to a group policy that is delivered or issued for delivery in a state other than Indiana.
(c) A certificate may be issued to a resident of Indiana pursuant to a group policy not described in subsection (d) that is delivered or issued for delivery in a state other than Indiana if:
(1) the delivery state has a law substantially similar to section 16 of this chapter;
(2) the delivery state has approved the group policy; and
(3) the policy or the certificate contains provisions that are:
(A) substantially similar to the provisions required by:
(i) section 19 of this chapter;
(ii) section 21 of this chapter; and
(iii) IC 27-8-5.6; and
(B) consistent with the requirements set forth in:
(i) section 24 of this chapter;
(ii) IC 27-8-6;
(iii) IC 27-8-14;
(iv) IC 27-8-23;
(v) 760 IAC 1-38.1; and
(vi) 760 IAC 1-39.
(d) A certificate may be issued to a resident of Indiana under an association group policy, a discretionary group policy, or a trust group policy that is delivered or issued for delivery in a state other than
Indiana if:
(1) the delivery state has a law substantially similar to section 16
of this chapter;
(2) the delivery state has approved the group policy; and
(3) the policy or the certificate contains provisions that are:
(A) substantially similar to the provisions required by:
(i) section 19 of this chapter or, if the policy or certificate is
described in section 2.5(b)(2) of this chapter, section 2.5 of
this chapter;
(ii) section 19.2 19.3 of this chapter if the policy or
certificate contains a waiver of coverage;
(iii) section 21 of this chapter; and
(iv) IC 27-8-5.6; and
(B) consistent with the requirements set forth in:
(i) section 15.6 of this chapter;
(ii) section 24 of this chapter;
(iii) section 26 of this chapter;
(iv) IC 27-8-6;
(v) IC 27-8-14;
(vi) IC 27-8-14.1;
(vii) IC 27-8-14.5;
(viii) IC 27-8-14.7;
(ix) IC 27-8-14.8;
(x) IC 27-8-20;
(xi) IC 27-8-23;
(xii) IC 27-8-24.3;
(xiii) IC 27-8-26;
(xiv) IC 27-8-28;
(xv) IC 27-8-29;
(xvi) 760 IAC 1-38.1; and
(xvii) 760 IAC 1-39.
(e) A certificate may be issued to a resident of Indiana pursuant to
a group policy that is delivered or issued for delivery in a state other
than Indiana if the commissioner determines that the policy pursuant
to which the certificate is issued meets the requirements set forth in
section 17(a) of this chapter.
(f) This section does not affect any other provision of Indiana law
governing the terms or benefits of coverage provided to a resident of
Indiana under any certificate or policy of insurance.
policy shall not be delivered or issued for delivery in Indiana to a group
that is not described in section 16(1)(A), 16(2)(A), 16(3)(A), 16(4)(A),
16(5)(A), 16(6)(A), 16(7), or 16(8) of this chapter unless:
(1) the group applies to the commissioner for approval as a
discretionary group;
(2) the commissioner reviews the group according to the same
standards as a group described in section 16 of this chapter;
and
(3) the commissioner finds that:
(1) (A) the issuance of the policy is not contrary to the best
interest of the public;
(2) (B) the issuance of the policy would result in economies of
acquisition or administration; and
(3) (C) the benefits of the policy are reasonable in relation to
the premiums charged.
(b) Except as otherwise provided in this chapter, an insurer may
exclude or limit the coverage under a policy described in subsection (a)
on any person as to whom evidence of individual insurability is not
satisfactory to the insurer.
(b) "Account" means one (1) of the two (2) accounts created under section 3 of this chapter.
(c) "Annuity contract", except as provided in section 2.3(e) of this chapter, includes:
(1) a guaranteed investment contract;
(2) a deposit administration contract;
(3) a structured settlement annuity;
(4) an annuity issued to or in connection with a government lottery; and
(5) an immediate or a deferred annuity contract.
(d) "Assessment base year" means, for an impaired insurer or insolvent insurer, the most recent calendar year for which required premium information is available preceding the calendar year during which the impaired insurer's or insolvent insurer's coverage date occurs.
(e) "Association", except when the context otherwise requires, means the Indiana life and health insurance guaranty association created by section 3 of this chapter.
(f) "Benefit plan" means a specific plan, fund, or program that is
established or maintained by an employer or an employee organization,
or both, that:
(1) provides retirement income to employees; or
(2) results in a deferral of income by employees for a period
extending to or beyond the termination of employment.
(g) "Board" refers to the board of directors of the association
selected under IC 27-8-8-4.
(h) "Called", when used in the context of assessments, means that
notice has been issued by the association to member insurers requiring
the member insurers to pay, within a time frame set forth in the notice,
an assessment that has been authorized by the board.
(i) "Commissioner" refers to the insurance commissioner appointed
under IC 27-1-1-2.
(j) "Contractual obligation" means an enforceable obligation under
a covered policy for which and to the extent that coverage is provided
under section 2.3 of this chapter.
(k) "Coverage date" means, with respect to a member insurer, the
date on which the earlier of the following occurs:
(1) The member insurer becomes an insolvent insurer.
(2) The association determines that the association will provide
coverage under section 5(a) of this chapter with respect to the
member insurer.
(l) "Covered policy" means a:
(1) nongroup policy or contract;
(2) certificate under a group policy or contract; or
(3) part of a policy, contract, or certificate described in
subdivisions (1) and (2);
for which coverage is provided under section 2.3 of this chapter.
(m) "Extracontractual claims" includes claims that relate to bad faith
in the payment of claims, punitive or exemplary damages, or attorney's
fees and costs.
(n) "Funding agreement" has the meaning set forth in
IC 27-1-12.7-1.
(o) "Impaired insurer" means a member insurer that is:
(1) not an insolvent insurer; and
(2) placed under an order of rehabilitation or conservation by a
court with jurisdiction.
(p) "Insolvent insurer" means a member insurer that is placed under
an order of liquidation with a finding of insolvency by a court with
jurisdiction.
(q) "Member insurer" means any person that holds a certificate of
authority to transact in Indiana any kind of insurance for which
coverage is provided under section 2.3 of this chapter. The term
includes an insurer whose certificate of authority to transact such
insurance in Indiana may have been suspended, revoked, not renewed,
or voluntarily withdrawn but does not include the following:
(1) A for-profit or nonprofit hospital or medical service
organization.
(2) A health maintenance organization under IC 27-13.
(3) A fraternal benefit society under IC 27-11.
(4) The Indiana Comprehensive Health Insurance Association or
any other mandatory state pooling plan or arrangement.
(5) An assessment company or another person that operates on an
assessment plan (as defined in IC 27-1-2-3(y)).
(6) An interinsurance or reciprocal exchange authorized by
IC 27-6-6.
(7) A prepaid limited service health maintenance organization or
a limited service health maintenance organization under
IC 27-13-34.
(8) A farm mutual insurance company under IC 27-5.1.
(9) A person operating as a Lloyds under IC 27-7-1.
(10) The political subdivision risk management fund established
by IC 27-1-29-10 and the political subdivision catastrophic
liability fund established by IC 27-1-29.1-7.
(11) The small employer health reinsurance board established by
IC 27-8-15.5-5.
(12) (11) A person similar to any person described in subdivisions
(1) through (11). (10).
(r) "Moody's Corporate Bond Yield Average" means:
(1) the monthly average of the composite yield on seasoned
corporate bonds as published by Moody's Investors Service, Inc.;
or
(2) if the monthly average described in subdivision (1) is no
longer published, an alternative publication of interest rates or
yields determined appropriate by the association.
(s) "Multiple employer welfare arrangement" has the meaning set
forth in IC 27-1-34-1.
(t) "Owner" means the person:
(1) identified as the legal owner of a policy or contract according
to the terms of the policy or contract; or
(2) otherwise vested with legal title to a policy or contract through
a valid assignment completed in accordance with the terms of the
policy or contract and properly recorded as the owner on the
books of the insurer.
The term does not include a person with a mere beneficial interest in a policy or contract.
(u) "Person" means an individual, a corporation, a limited liability company, a partnership, an association, a governmental entity, a voluntary organization, a trust, a trustee, or another business entity or organization.
(v) "Plan sponsor" refers to only one (1) of the following with respect to a benefit plan:
(1) The employer, in the case of a benefit plan established or maintained by a single employer.
(2) The holding company or controlling affiliate, in the case of a benefit plan established or maintained by affiliated companies comprising a consolidated corporation.
(3) The employee organization, in the case of a benefit plan established or maintained by an employee organization.
(4) In a case of a benefit plan established or maintained:
(A) by two (2) or more employers;
(B) by two (2) or more employee organizations; or
(C) jointly by one (1) or more employers and one (1) or more employee organizations;
and that is not of a type described in subdivision (2), the association, committee, joint board of trustees, or other similar group of representatives of the parties that establish or maintain the benefit plan.
(w) "Premiums" means amounts, deposits, and considerations received on covered policies, less returned premiums, returned deposits, returned considerations, dividends, and experience credits. The term does not include the following:
(1) Amounts, deposits, and considerations received for policies or contracts or parts of policies or contracts for which coverage is not provided under section 2.3(d) of this chapter, as qualified by section 2.3(e) of this chapter, except that an assessable premium must not be reduced on account of the limitations set forth in section 2.3(e)(3), 2.3(e)(15), or 2.3(f)(2) of this chapter.
(2) Premiums in excess of five million dollars ($5,000,000) on an unallocated annuity contract not issued or not connected with a governmental benefit plan established under Section 401, 403(b), or 457 of the United States Internal Revenue Code.
(x) "Principal place of business" refers to the single state in which individuals who establish policy for the direction, control, and coordination of the operations of an entity as a whole primarily exercise the direction, control, and coordination, as determined by the
association in the association's reasonable judgment by considering the
following factors:
(1) The state in which the primary executive and administrative
headquarters of the entity is located.
(2) The state in which the principal office of the chief executive
officer of the entity is located.
(3) The state in which the board of directors or similar governing
person of the entity conducts the majority of the board of
directors' or governing person's meetings.
(4) The state in which the executive or management committee of
the board of directors or similar governing person of the entity
conducts the majority of the committee's meetings.
(5) The state from which the management of the overall
operations of the entity is directed.
However, in the case of a plan sponsor, if more than fifty percent (50%)
of the participants in the plan sponsor's benefit plan are employed in a
single state, that state is considered to be the principal place of business
of the plan sponsor. The principal place of business of a plan sponsor
of a benefit plan described in subsection (v)(4), if more than fifty
percent (50%) of the participants in the plan sponsor's benefit plan are
not employed in a single state, is considered to be the principal place
of business of the association, committee, joint board of trustees, or
other similar group of representatives of the parties that establish or
maintain the benefit plan and, in the absence of a specific or clear
designation of a principal place of business, is considered to be the
principal place of business of the employer or employee organization
that has the largest investment in the benefit plan in question on the
coverage date.
(y) "Receivership court" refers to the court in an insolvent insurer's
or impaired insurer's state that has jurisdiction over the conservation,
rehabilitation, or liquidation of the insolvent insurer or impaired
insurer.
(z) "Resident" means a person that resides or has the person's
principal place of business in Indiana on the applicable coverage date.
(aa) "State" includes a state, the District of Columbia, Puerto Rico,
and a United States possession, territory, or protectorate.
(bb) "Structured settlement annuity" means an annuity purchased to
fund periodic payments for a plaintiff or other claimant in payment for
or with respect to personal injury suffered by the plaintiff or other
claimant.
(cc) "Supplemental contract" means a written agreement entered
into for the distribution of proceeds under a life, health, or annuity
policy or contract.
(dd) "Unallocated annuity contract" means an annuity contract or
group annuity certificate:
(1) the owner of which is not a natural person; and
(2) that does not identify at least one (1) specific natural person
as an annuitant;
except to the extent of any annuity benefits guaranteed to a natural
person by an insurer under the contract or certificate. For purposes of
this chapter, an unallocated annuity contract shall not be considered a
group policy or group contract.
(1) Any part of the premium or benefits is paid by a small employer or any covered individual is reimbursed, whether through wage adjustments or otherwise, by a small employer for any part of the premium not including the administrative expenses of administering a payroll deduction plan where the employee contributes one hundred percent (100%) of the premium without reimbursement.
(2) The health benefit plan is treated by the employer or any of the covered individuals as part of a plan or program for purposes of Section 106 or 162 of the United States Internal Revenue Code.
(1) who is employed to work at least thirty (30) hours each week;
(2) who meets an applicable waiting period required by a small employer before gaining coverage under a health insurance policy.
(b) The term includes:
(1) a sole proprietor;
(2) a partner in a partnership; and
(3) an owner of an S corporation;
regardless of whether the sole proprietor, partner, or owner is included as an employee for purposes of taxation of a small employer.
(1) an employee who works on a temporary or substitute basis; or
(2) a seasonal employee.
(1) hospital or medical expense incurred policy or certificate;
(2) hospital or medical service plan contract; or
(3) health maintenance organization subscriber contract;
provided to the employees of a small employer.
(b) The term does not include the following:
(1) Accident-only, credit, dental, vision, Medicare supplement, long term care, or disability income insurance.
(2) Coverage issued as a supplement to liability insurance.
(3) Worker's compensation or similar insurance.
(4) Automobile medical payment insurance.
(5) A specified disease policy.
(A) may not be renewed; and
(B) has a duration of not more than six (6) months.
(A) hospital confinement, critical illness, or intensive care; or
(B) gaps for deductibles or copayments.
(8) A supplemental plan that always pays in addition to other coverage.
(9) A student health plan.
(10) An employer sponsored health benefit plan that is:
(A) provided to individuals who are eligible for Medicare; and
(B) not marketed as, or held out to be, a Medicare supplement policy.
(1) loses coverage under the plan as the result of:
(A) termination of employment;
(B) reduction of hours;
(C) marriage dissolution; or
(D) attainment of any age specified in the plan;
(2) is not eligible for continuation coverage under the federal Consolidated Omnibus Budget Reconciliation Act of 1985; and
the individual is entitled to receive a conversion policy from the small employer insurer.
(b) A request under subsection
(c) The premium for a conversion policy issued under this section shall not exceed one hundred fifty percent (150%) of the rate that would have been charged under the small employer health insurance plan with respect to the individual if the individual had been covered as an eligible employee under the plan during the same period. If the health insurance plan under which the individual was covered is canceled or is not renewed, the rates shall be based on the rate that would have been charged with respect to the individual if the plan had continued in force, as determined by the small employer insurer in accordance with standard actuarial principles.
(d) A conversion policy issued under this section must be approved by the insurance commissioner as described in IC 27-8-5-1. The commissioner may not approve a conversion policy unless the policy and its benefits are:
(1) comparable to those required under IC 27-13-1-4(a)(2) through IC 27-13-1-4(a)(5);
(2) reasonable in relation to the premium charged; and
(3) in compliance with IC 27-8-6-1.
If the benefit limits of the conversion policy are not more than the benefit limits of the small employer's health insurance plan, the small employer insurer shall credit the individual with any waiting period, deductible, or coinsurance credited to the individual under the small employer's health insurance plan.
(e) This section expires on the effective date of a mechanism enacted by the general assembly to offset the potential fiscal impact on small employers and small employer insurers that results from the establishment of a continuation policy under section 31.1 of this chapter.
(1) Maintain a physical office in Indiana.
(2) If the health maintenance organization changes the location of the office maintained under subdivision (1), provide written notice to the department and all subscribers at least thirty (30) days before the location is changed, including the address and telephone number of the new location.
(b) A domestic health maintenance organization operating under this article is subject to the following:
(1) IC 27-1-7-11.
(2) IC 27-1-6-21.
(1) IC 27-1-36 concerning risk based capital, unless exempted by the commissioner under IC 27-1-36-1.
(2) IC 27-13-2-10, concerning a change of office location.
to out of network providers and continuation of care.
(12) (13) IC 27-13-40 concerning comparison sheets of services
provided by the limited service health maintenance organization.
; (10)IN1240.1.63. --> SECTION 63. THE FOLLOWING ARE REPEALED [EFFECTIVE JULY 1, 2010] IC 27-1-3.5-3; IC 27-1-3.5-3.5; IC 27-1-25-7.5; IC 27-8-15-2; IC 27-8-15.5.
(b) This SECTION expires July 1, 2015.
