SB 386-1_ Filed 04/09/2001, 10:31

Text Box

Adopted Rejected


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COMMITTEE REPORT


                                                        YES:

12

                                                        NO:
0

MR. SPEAKER:

    Your Committee on       Insurance, Corporations and Small Business     , to which was referred       Senate Bill 386     , has had the same under consideration and begs leave to report the same back to the House with the recommendation that said bill be amended as follows:

SOURCE: Page 1, line 1; (01)CR038601.1. -->     Page 1, between the enacting clause and line 1, begin a new paragraph and insert:
SOURCE: IC 2-5-23-2.5; (01)CR038601.1. -->     "SECTION 1. IC 2-5-23-2.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 2.5. As used in this chapter, "health care facility" means an institution providing health care services that is licensed in Indiana, including institutions primarily engaged in providing services for health maintenance organizations or for the diagnosis or treatment of human disease, pain, injury, deformity, or physical condition. The term includes a general hospital, a special hospital, a mental hospital, a public health center, a diagnostic center, a treatment center, a rehabilitation center, an extended care facility, a skilled nursing home, a nursing home, an intermediate care facility, a tuberculosis hospital, a chronic disease hospital, a maternity hospital, an outpatient clinic, a home health care agency, a bioanalytical laboratory, or a central services

facility servicing one (1) or more such institutions.

SOURCE: IC 2-5-23-8; (01)CR038601.2. -->     SECTION 2. IC 2-5-23-8 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 8. Beginning May 1, 1997, The health policy advisory committee is established. At the request of the chairman, the health policy advisory committee shall provide information and otherwise assist the commission to perform the duties of the commission under this chapter. The health policy advisory committee members are ex officio and may not vote. The health policy advisory committee members shall be appointed from the general public and must include one (1) individual who represents each of the following:
        (1) The interests of public hospitals.
        (2) The interests of community mental health centers.
        (3) The interests of community health centers.
        (4) The interests of the long term care industry.
        (5) The interests of health care professionals licensed under IC 25, but not licensed under IC 25-22.5.
        (6) The interests of rural hospitals. An individual appointed under this subdivision must be licensed under IC 25-22.5.
        (7) The interests of health maintenance organizations (as defined in IC 27-13-1-19 ).
        (8) The interests of for-profit health care facilities (as defined in IC 27-8-10-1(l)).
        (9) (8) A statewide consumer organization.
        (10) (9) A statewide senior citizen organization.
        (11) (10) A statewide organization representing people with disabilities.
        (12) (11) Organized labor.
        (13) (12) The interests of businesses that purchase health insurance policies.
        (14) (13) The interests of businesses that provide employee welfare benefit plans (as defined in 29 U.S.C. 1002) that are self-funded.
        (15) (14) A minority community.
        (16) (15) The uninsured. An individual appointed under this subdivision must be and must have been chronically uninsured.
        (17) (16) An individual who is not associated with any organization, business, or profession represented in this

subsection other than as a consumer.

SOURCE: IC 5-10-8-8.1; (01)CR038601.3. -->     SECTION 3. IC 5-10-8-8.1 , AS AMENDED BY P.L.233-1999, SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 8.1. (a) This section applies only to the state and former legislators, instead of section 8 of this chapter.
    (b) As used in this section, "legislator" means a member of the general assembly.
    (c) After June 30, 1988, the state shall provide to each retired legislator:
        (1) whose retirement date is after June 30, 1988;
        (2) who is not participating in a group health insurance coverage plan:
            (A) including Medicare coverage as prescribed by 42 U.S.C. 1395 et seq.; but
            (B) not including a group health insurance plan provided by the state; or a health insurance plan provided under IC 27-8-10;
        (3) who served as a legislator for at least ten (10) years; and
        (4) who participated in a group health insurance plan provided by the state on the legislator's retirement date;
a group health insurance program that is equal to that offered active employees.
    (d) A retired legislator who qualifies under subsection (c) may participate in the group health insurance program if the retired legislator:
        (1) pays an amount equal to the employer's and employee's premium for the group health insurance for an active employee; and
        (2) within ninety (90) days after the legislator's retirement date files a written request for insurance coverage with the employer.
    (e) A retired legislator's eligibility to continue insurance under this section ends when the member becomes eligible for Medicare coverage as prescribed by 42 U.S.C. 1395 et seq., or when the employer terminates the health insurance program.
    (f) A retired legislator who is eligible for insurance coverage under this section may elect to have the legislator's spouse covered under the health insurance program at the time the legislator retires. If a retired legislator's spouse pays the amount the retired legislator would have

been required to pay for coverage selected by the spouse, the spouse's subsequent eligibility to continue insurance under this section is not affected by the death of the retired legislator and is not affected by the retired legislator's eligibility for Medicare. The spouse's eligibility ends on the earliest of the following:
        (1) When the spouse becomes eligible for Medicare coverage as prescribed by 42 U.S.C. 1395 et seq.
        (2) When the employer terminates the health insurance program.
        (3) The date of the spouse's remarriage.
    (g) The surviving spouse of a legislator who dies or has died in office may elect to participate in the group health insurance program if all of the following apply:
        (1) The deceased legislator would have been eligible to participate in the group health insurance program under this section had the legislator retired on the day of the legislator's death.
        (2) The surviving spouse files a written request for insurance coverage with the employer.
        (3) The surviving spouse pays an amount equal to the employer's and employee's premium for the group health insurance for an active employee.
    (h) The eligibility of the surviving spouse of a legislator to purchase group health insurance under subsection (g) ends on the earliest of the following:
        (1) When the employer terminates the health insurance program.
        (2) The date of the spouse's remarriage.
        (3) When the spouse becomes eligible for Medicare coverage as prescribed by 42 U.S.C. 1395 et seq.

SOURCE: IC 16-21-3-2; (01)CR038601.4. -->     SECTION 4. IC 16-21-3-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. The state health commissioner may take action under section 1 of this chapter on any of the following grounds:
        (1) Violation of any of the provisions of this chapter or of the rules adopted under this chapter.
        (2) Permitting, aiding, or abetting the commission of any illegal act in an institution.
        (3) Knowingly collecting or attempting to collect from a subscriber (as defined in IC 27-13-1-32 ) or an enrollee (as

defined in IC 27-13-1-12 ) of a health maintenance organization (as defined in IC 27-13-1-19 ) any amounts that are owed by the health maintenance organization.
        (4)
Conduct or practice found by the council to be detrimental to the welfare of the patients of an institution.

SOURCE: IC 22-2-6-2; (01)CR038601.5. -->     SECTION 5. IC 22-2-6-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. (a) Any assignment of the wages of an employee is valid only if all of the following conditions are satisfied:
        (1) The assignment is:
            (A) in writing;
            (B) signed by the employee personally;
            (C) by its terms revocable at any time by the employee upon written notice to the employer; and
            (D) agreed to in writing by the employer.
        (2) An executed copy of the assignment is delivered to the employer within ten (10) days after its execution.
        (3) The assignment is made for a purpose described in subsection (b).
    (b) A wage assignment under this section may be made for the purpose of paying any of the following:
        (1) Premium on a policy of insurance. obtained for the employee by the employer.
        (2) Pledge or contribution of the employee to a charitable or nonprofit organization.
        (3) Purchase price of bonds or securities, issued or guaranteed by the United States.
        (4) Purchase price of shares of stock, or fractional interests therein, of the employing company, or of a company owning the majority of the issued and outstanding stock of the employing company, whether purchased from such company, in the open market or otherwise. However, if such shares are to be purchased on installments pursuant to a written purchase agreement, the employee has the right under the purchase agreement at any time before completing purchase of such shares to cancel said agreement and to have repaid promptly the amount of all installment payments which theretofore have been made.
        (5) Dues to become owing by the employee to a labor

organization of which the employee is a member.
        (6) Purchase price of merchandise sold by the employer to the employee, at the written request of the employee.
        (7) Amount of a loan made to the employee by the employer and evidenced by a written instrument executed by the employee.
        (8) Contributions, assessments, or dues of the employee to a hospital service or a surgical or medical expense plan or to an employees' association, trust, or plan existing for the purpose of paying pensions or other benefits to said employee or to others designated by the employee.
        (9) Payment to any credit union, nonprofit organizations, or associations of employees of such employer organized under any law of this state or of the United States.
        (10) Payment to any person or organization regulated under the Uniform Consumer Credit Code (IC 24-4.5) for deposit or credit to the employee's account by electronic transfer or as otherwise designated by the employee.
        (11) Premiums on policies of insurance and annuities purchased by the employee on the employee's life.
        (12) The purchase price of shares or fractional interest in shares in one (1) or more mutual funds.

SOURCE: IC 25-1-9-4; (01)CR038601.6. -->     SECTION 6. IC 25-1-9-4 , AS AMENDED BY P.L.22-1999, SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 4. (a) A practitioner shall conduct the practitioner's practice in accordance with the standards established by the board regulating the profession in question and is subject to the exercise of the disciplinary sanctions under section 9 of this chapter if, after a hearing, the board finds:
        (1) a practitioner has:
            (A) engaged in or knowingly cooperated in fraud or material deception in order to obtain a license to practice;
            (B) engaged in fraud or material deception in the course of professional services or activities; or
            (C) advertised services in a false or misleading manner;
        (2) a practitioner has been convicted of a crime that has a direct bearing on the practitioner's ability to continue to practice competently;
        (3) a practitioner has knowingly violated any state statute or rule,

or federal statute or regulation, regulating the profession in question;
        (4) a practitioner has continued to practice although the practitioner has become unfit to practice due to:
            (A) professional incompetence that:
                (i) may include the undertaking of professional activities that the practitioner is not qualified by training or experience to undertake; and
                (ii) does not include activities performed under IC 16-21-2-9 ;
            (B) failure to keep abreast of current professional theory or practice;
            (C) physical or mental disability; or
            (D) addiction to, abuse of, or severe dependency upon alcohol or other drugs that endanger the public by impairing a practitioner's ability to practice safely;
        (5) a practitioner has engaged in a course of lewd or immoral conduct in connection with the delivery of services to the public;
        (6) a practitioner has allowed the practitioner's name or a license issued under this chapter to be used in connection with an individual who renders services beyond the scope of that individual's training, experience, or competence;
        (7) a practitioner has had disciplinary action taken against the practitioner or the practitioner's license to practice in any other state or jurisdiction on grounds similar to those under this chapter;
        (8) a practitioner has diverted:
            (A) a legend drug (as defined in IC 16-18-2-199 ); or
            (B) any other drug or device issued under a drug order (as defined in IC 16-42-19-3 ) for another person;
        (9) a practitioner, except as otherwise provided by law, has knowingly prescribed, sold, or administered any drug classified as a narcotic, addicting, or dangerous drug to a habitue or addict; or
        (10) a practitioner has failed to comply with an order imposing a sanction under section 9 of this chapter; or
        (11) a practitioner who is a participating provider of a health maintenance organization has knowingly collected or

attempted to collect from a subscriber or enrollee of the health maintenance organization any sums that are owed by the health maintenance organization.
    (b) A certified copy of the record of disciplinary action is conclusive evidence of the other jurisdiction's disciplinary action under subsection (a)(7).".

SOURCE: Page 2, line 30; (01)CR038601.2. -->     Page 2, after line 30, begin a new paragraph and insert:
SOURCE: IC 27-1-12-2; (01)CR038601.8. -->     "SECTION 8. IC 27-1-12-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. (a) The following definitions apply to this section:
        (1) "Acceptable collateral" means, as to securities lending transactions:
            (A) cash;
            (B) cash equivalents;
            (C) letters of credit; and
            (D) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
        (2) "Acceptable collateral" means, as to lending foreign securities, sovereign debt that is rated:
            (A) A- or higher by Standard & Poor's Corporation;
            (B) A3 or higher by Moody's Investors Service, Inc.;
            (C) A- or higher by Duff and Phelps, Inc.; or
            (D) 1 by the Securities Valuation Office.
        (3) "Acceptable collateral" means, as to repurchase transactions:
            (A) cash;
            (B) cash equivalents; and
            (C) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
        (4) "Acceptable collateral" means, as to reverse repurchase transactions:
            (A) cash; and
            (B) cash equivalents.
        (5) "Admitted assets" means assets permitted to be reported as admitted assets on the statutory financial statement of the life insurance company most recently required to be filed with the commissioner.
        (6) "Business entity" means:
            (A) a sole proprietorship;
            (B) a corporation;
            (C) a limited liability company;
            (D) an association;
            (E) a partnership;
            (F) a joint stock company;
            (G) a joint venture;
            (H) a mutual fund;
            (I) a trust;
            (J) a joint tenancy; or
            (K) other, similar form of business organization;
        whether organized for-profit or not-for-profit.
        (7) "Cash" means any of the following:
            (A) United States denominated paper currency and coins.
            (B) Negotiable money orders and checks.
            (C) Funds held in any time or demand deposit in any depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
        (8) "Cash equivalent" means any of the following:
            (A) A certificate of deposit issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
            (B) A banker's acceptance issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
            (C) A government money market mutual fund.
            (D) A class one money market mutual fund.
        (9) "Class one money market mutual fund" means a money market mutual fund that at all times qualifies for investment pursuant to the "Purposes and Procedures of the Securities Valuation Office" or any successor publication either using the bond class one reserve factor or because it is exempt from asset valuation reserve requirements.
        (10) "Dollar roll transaction" means two (2) simultaneous transactions that have settlement dates not more than ninety-six (96) days apart and that meet the following description:
            (A) In one (1) transaction, a life insurance company sells to a business entity one (1) or both of the following:
                (i) Asset-backed securities that are issued, assumed, or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation or the successor of an entity referred to in this item.
                (ii) Other asset-backed securities referred to in Section 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1), as amended.
            (B) In the other transaction, the life insurance company is obligated to purchase from the same business entity securities that are substantially similar to the securities sold under clause (A).
        (11) "Domestic jurisdiction" means:
            (A) the United States;
            (B) any state, territory, or possession of the United States;
            (C) the District of Columbia;
            (D) Canada; or
            (E) any province of Canada.
        (12) "Earnings available for fixed charges" means income, after deducting:
            (A) operating and maintenance expenses other than expenses that are fixed charges;
            (B) taxes other than federal and state income taxes;
            (C) depreciation; and
            (D) depletion;
        but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of a business entity.
        (13) "Fixed charges" includes:
            (A) interest on funded and unfunded debt;
            (B) amortization of debt discount; and
            (C) rentals for leased property.
        (14) "Foreign currency" means a currency of a foreign

jurisdiction.
        (15) "Foreign jurisdiction" means a jurisdiction other than a domestic jurisdiction.
        (16) "Government money market mutual fund" means a money market mutual fund that at all times:
            (A) invests only in:
                (i) obligations that are issued, guaranteed, or insured by the United States; or
                (ii) collateralized repurchase agreements composed of obligations that are issued, guaranteed, or insured by the United States; and
            (B) qualifies for investment without a reserve pursuant to the "Purposes and Procedures of the Securities Valuation Office" or any successor publication.
        (17) "Guaranteed or insured," when used in reference to an obligation acquired under this section, means that the guarantor or insurer has agreed to:
            (A) perform or insure the obligation of the obligor or purchase the obligation; or
            (B) be unconditionally obligated, until the obligation is repaid, to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity, or sufficient liquidity to enable the obligor to pay the obligation in full.
        (18) "Investment company" means:
            (A) an investment company as defined in Section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended; or
            (B) a person described in Section 3(c) of the Investment Company Act of 1940.
        (19) "Investment company series" means an investment portfolio of an investment company that is organized as a series company to which assets of the investment company have been specifically allocated.
        (20) "Letter of credit" means a clean, irrevocable, and unconditional letter of credit that is:
            (A) issued or confirmed by; and
            (B) payable and presentable at;
        a financial institution on the list of financial institutions meeting

the standards for issuing letters of credit under the "Purposes and Procedures of the Securities Valuation Office" or any successor publication. To constitute acceptable collateral for the purposes of paragraph 29 of subsection (b) of this section, a letter of credit must have an expiration date beyond the term of the subject transaction.
        (21) "Market value" means the following:
            (A) As to cash, the amount of the cash.
            (B) As to cash equivalents, the amount of the cash equivalents.
            (C) As to letters of credit, the amount of the letters of credit.
            (D) As to a security as of any date:
                (i) the price for the security on that date obtained from a generally recognized source, or the most recent quotation from such a source; or
                (ii) if no generally recognized source exists, the price for the security as determined in good faith by the parties to a transaction;
            plus accrued but unpaid income on the security to the extent not included in the price as of that date.
        (22) "Money market mutual fund" means a mutual fund that meets the conditions of 17 CFR 270.2a-7, under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
        (23) "Multilateral development bank" means an international development organization of which the United States is a member.
        (24) "Mutual fund" means:
            (A) an investment company; or
            (B) in the case of an investment company that is organized as a series company, an investment company series;
        that is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
        (25) "Obligation" means any of the following:
            (A) A bond.
            (B) A note.
            (C) A debenture.
            (D) Any other form of evidence of debt.
        (26) "Person" means:


            (A) an individual;
            (B) a business entity;
            (C) a multilateral development bank; or
            (D) a government or quasi-governmental body, such as a political subdivision or a government sponsored enterprise.
        (27) "Repurchase transaction" means a transaction in which a life insurance company purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the life insurance company at a specified price, either within a specified period of time or upon demand.
        (28) "Reverse repurchase transaction" means a transaction in which a life insurance company sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand.
        (29) "Securities lending transaction" means a transaction in which securities are loaned by a life insurance company to a business entity that is obligated to return the loaned securities or equivalent securities to the life insurance company, either within a specified period of time or upon demand.
        (30) "Securities Valuation Office" refers to:
            (A) the Securities Valuation Office of the National Association of Insurance Commissioners; or
            (B) any successor of the office referred to in Clause (A) established by the National Association of Insurance Commissioners.
        (31) "Series company" means an investment company that is organized as a series company (as defined in Rule 18f-2(a) adopted under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended).
        (32) "Supported", when used in reference to an obligation, by whomever issued or made, means that:
            (a) repayment of the obligation by:
                (i) a domestic jurisdiction or by an administration, agency, authority, or instrumentality of a domestic jurisdiction; or
                (ii) a business entity;
            as the case may be, is secured by real or personal property of

value at least equal to the principal amount of the obligation by means of mortgage, assignment of vendor's interest in one (1) or more conditional sales contracts, other title retention device, or by means of other security interest in such property for the benefit of the holder of the obligation; and
            (b) the:
                (i) domestic jurisdiction or administration, agency, authority, or instrumentality of the domestic jurisdiction; or
                (ii) business entity;
            as the case may be, has entered into a firm agreement to rent or use the property pursuant to which it is obligated to pay money as rental or for the use of such property in amounts and at times which shall be sufficient, after provision for taxes upon and other expenses of use of the property, to repay in full the obligation with interest and when such agreement and the money obligated to be paid thereunder are assigned, pledged, or secured for the benefit of the holder of the obligation. However, where the security for the repayment of the obligation consists of a first mortgage lien or deed of trust on a fee interest in real property, the obligation may provide for the amortization, during the initial, fixed period of the lease or contract, of less than one hundred percent (100%) of the obligation if there is pledged or assigned, as additional security for the obligation, sufficient rentals payable under the lease, or of contract payments, to secure the amortized obligation payments required during the initial, fixed period of the lease or contract, including but not limited to payments of principal, interest, and taxes other than the income taxes of the borrower, and if there is to be left unamortized at the end of such period an amount not greater than the original appraised value of the land only, exclusive of all improvements, as prescribed by law.
    (b) Investments of domestic life insurance companies at the time they are made shall conform to the following categories, conditions, limitations, and standards:
    1. Obligations of a domestic jurisdiction or of any administration, agency, authority, or instrumentality of a domestic jurisdiction.
    2. Obligations guaranteed, supported, or insured as to principal and

interest by a domestic jurisdiction or by an administration, agency, authority, or instrumentality of a domestic jurisdiction.
    3. Obligations issued under or pursuant to the Farm Credit Act of 1971 (12 U.S.C. 2001 through 2279aa-14) as in effect on December 31, 1990, or the Federal Home Loan Bank Act (12 U.S.C. 1421 through 1449) as in effect on December 31, 1990, interest bearing obligations of the FSLIC Resolution Fund or shares of any institution whose deposits are insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation to the extent that such shares are insured, obligations issued or guaranteed by a multilateral development bank, and obligations issued or guaranteed by the African Development Bank.
    4. Obligations issued, guaranteed, or insured as to principal and interest by a city, county, drainage district, road district, school district, tax district, town, township, village, or other civil administration, agency, authority, instrumentality, or subdivision of a domestic jurisdiction, providing such obligations are authorized by law and are:
        (a) direct and general obligations of the issuing, guaranteeing or insuring governmental unit, administration, agency, authority, district, subdivision, or instrumentality;
        (b) payable from designated revenues pledged to the payment of the principal and interest thereof; or
        (c) improvement bonds or other obligations constituting a first lien, except for tax liens, against all of the real estate within the improvement district or on that part of such real estate not discharged from such lien through payment of the assessment. The area to which such improvement bonds or other obligations relate shall be situated within the limits of a town or city and at least fifty percent (50%) of the properties within such area shall be improved with business buildings or residences.
    5. Loans evidenced by obligations secured by first mortgage liens on otherwise unencumbered real estate or otherwise unencumbered leaseholds having at least fifty (50) years of unexpired term, such real estate, or leaseholds to be located in a domestic jurisdiction. Such loans shall not exceed eighty percent (80%) of the fair value of the security determined in a manner satisfactory to the department, except that the percentage stated may be exceeded if and to the extent such excess is guaranteed or insured by:


        (a) a domestic jurisdiction or by an administration, agency, authority, or instrumentality of any domestic jurisdiction; or
        (b) a private mortgage insurance corporation approved by the department.
If improvements constitute a part of the value of the real estate or leaseholds, such improvements shall be insured against fire for the benefit of the mortgagee in an amount not less than the difference between the value of the land and the unpaid balance of the loan.
For the purpose of this section, real estate or a leasehold shall not be deemed to be encumbered by reason of the existence in relation thereto of:
        (1) liens inferior to the lien securing the loan made by the life insurance company;
        (2) taxes or assessment liens not delinquent;
        (3) instruments creating or reserving mineral, oil, water or timber rights, rights-of-way, common or joint driveways, sewers, walls, or utility connections;
        (4) building restrictions or other restrictive covenants; or
        (5) an unassigned lease reserving rents or profits to the owner.
A loan that is authorized by this paragraph remains qualified under this paragraph notwithstanding any refinancing, modification, or extension of the loan. Investments authorized by this paragraph shall not in the aggregate exceed forty-five percent (45%) of the life insurance company's admitted assets.
    6. Loans evidenced by obligations guaranteed or insured, but only to the extent guaranteed or insured, by a domestic jurisdiction or by any agency, administration, authority, or instrumentality of any domestic jurisdiction, and secured by second or subsequent mortgages or deeds of trust on real estate or leaseholds, provided the terms of the leasehold mortgages or deeds of trust shall not exceed four-fifths (4/5) of the unexpired lease term, including enforceable renewable options remaining at the time of the loan.
    7. Real estate contracts involving otherwise unencumbered real estate situated in a domestic jurisdiction, to be secured by the title to such real estate, which shall be transferred to the life insurance company or to a trustee or nominee of its choosing. For statement and deposit purposes, the value of a contract acquired pursuant to this paragraph shall be whichever of the following amounts is the least:
        (a) eighty percent (80%) of the contract price of the real estate;
        (b) eighty percent (80%) of the fair value of the real estate at the time the contract is purchased, such value to be determined in a manner satisfactory to the department; or
        (c) the amount due under the contract.
For the purpose of this paragraph, real estate shall not be deemed encumbered by reason of the existence in relation thereto of: (1) taxes or assessment liens not delinquent; (2) instruments creating or reserving mineral, oil, water or timber rights, rights-of-way, common or joint driveways, sewers, walls or utility connections; (3) building restrictions or other restrictive covenants; or (4) an unassigned lease reserving rents or profits to the owner. Fire insurance upon improvements constituting a part of the real estate described in the contract shall be maintained in an amount at least equal to the unpaid balance due under the contract or the fair value of improvements, whichever is the lesser.
    8. Improved or unimproved real property, whether encumbered or unencumbered, or any interest therein, held directly or evidenced by joint venture interests, general or limited partnership interests, trust certificates, or any other instruments, and acquired by the life insurance company as an investment, which real property, if unimproved, is developed within five (5) years. Real property acquired for investment under this paragraph, whether leased or intended to be developed for commercial or residential purposes or otherwise lawfully held, is subject to the following conditions and limitations:
        (a) The real estate shall be located in a domestic jurisdiction.
        (b) The admitted assets of the life insurance company must exceed twenty-five million dollars ($25,000,000).
        (c) The life insurance company shall have the right to expend from time to time whatever amount or amounts may be necessary to conform the real estate to the needs and purposes of the lessee and the amount so expended shall be added to and become a part of the investment in such real estate.
        (d) The value for statement and deposit purposes of an investment under this paragraph shall be reduced annually by amortization of the costs of improvement and development, less land costs, over the expected life of the property, which value and amortization shall for statement and deposit purposes be determined in a

manner satisfactory to the commissioner. In determining such value with respect to the calendar years in which an investment begins or ends with respect to a point in time other than the beginning or end of a calendar year, the amortization provided above shall be made on a proportional basis.
        (e) Fire insurance shall be maintained in an amount at least equal to the insurable value of the improvements or the difference between the value of the land and the value at which such real estate is carried for statement and deposit purposes, whichever amount is smaller.
        (f) Real estate acquired in any of the manners described and sanctioned under section 3 of this chapter, or otherwise lawfully held, except paragraph 5 of that section which specifically relates to the acquisition of real estate under this paragraph, shall not be affected in any respect by this paragraph unless such real estate at or subsequent to its acquisition fulfills the conditions and limitations of this paragraph, and is declared by the life insurance company in a writing filed with the department to be an investment under this paragraph. The value of real estate acquired under section 3 of this chapter, or otherwise lawfully held, and invested under this paragraph shall be initially that at which it was carried for statement and deposit purposes under that section.
        (g) Neither the cost of each parcel of improved real property nor the aggregate cost of all unimproved real property acquired under the authority of this paragraph may exceed two percent (2%) of the life insurance company's admitted assets. For purposes of this paragraph, "unimproved real property" means land containing no structures intended for commercial, industrial, or residential occupancy, and "improved real property" consists of all land containing any such structure. When applying the limitations of subparagraph (d) of this paragraph, unimproved real property becomes improved real property as soon as construction of any commercial, industrial, or residential structure is so completed as to be capable of producing income. In the event the real property is mortgaged with recourse to the life insurance company or the life insurance company commences a plan of construction upon real property at its own expense or guarantees payment of borrowed funds to be used for such construction, the total project

cost of the real property will be used in applying the two percent (2%) test. Further, no more than ten percent (10%) of the life insurance company's admitted assets may be invested in all property, measured by the property value for statement and deposit purposes as defined in this paragraph, held under this paragraph at the same time.
    9. Deposits of cash in a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation, or certificates of deposit issued by a depository institution, the deposits of which are insured by the Federal Deposit Insurance Corporation.
    10. Bank and bankers' acceptances and other bills of exchange of kinds and maturities eligible for purchase or rediscount by federal reserve banks.
    11. Obligations that are issued, guaranteed, assumed, or supported by a business entity organized under the laws of a domestic jurisdiction and that are rated:
        (a) BBB- or higher by Standard & Poor's Corporation (or A-2 or higher in the case of commercial paper);
        (b) Baa 3 or higher by Moody's Investors Service, Inc. (or P-2 or higher in the case of commercial paper);
        (c) BBB- or higher by Duff and Phelps, Inc. (or D-2 or higher in the case of commercial paper); or
        (d) 1 or 2 by the Securities Valuation Office.
    Investments may also be made under this paragraph in obligations that have not received a rating if the earnings available for fixed charges of the business entity for the period of its five (5) fiscal years next preceding the date of purchase shall have averaged per year not less than one and one-half (1 1/2) times its average annual fixed charges applicable to such period and if during either of the last two (2) years of such period such earnings available for fixed charges shall have been not less than one and one-half (1 1/2) times its fixed charges for such year. However, if the business entity is a finance company or other lending institution at least eighty percent (80%) of the assets of which are cash and receivables representing loans or discounts made or purchased by it, the multiple shall be one and one-quarter (1 1/4) instead of one and one-half (1 1/2).
    11.(A) Obligations issued, guaranteed, or assumed by a business entity organized under the laws of a domestic jurisdiction, which

obligations have not received a rating or, if rated, have not received a rating that would qualify the obligations for investment under paragraph 11 of this section. Investments authorized by this paragraph may not exceed ten percent (10%) of the life insurance company's admitted assets.
    12. Preferred stock of, or common or preferred stock guaranteed as to dividends by, any corporation organized under the laws of a domestic jurisdiction, which over the period of the seven (7) fiscal years immediately preceding the date of purchase earned an average amount per annum at least equal to five percent (5%) of the par value of its common and preferred stock (or, in the case of stocks having no par value, of its issued or stated value) outstanding at date of purchase, or which over such period earned an average amount per annum at least equal to two (2) times the total of its annual interest charges, preferred dividends and dividends guaranteed by it, determined with reference to the date of purchase. No investment shall be made under this paragraph in a stock upon which any dividend is in arrears or has been in arrears for ninety (90) days within the immediately preceding five (5) year period.
    13. Common stock of any solvent corporation organized under the laws of a domestic jurisdiction which over the seven (7) fiscal years immediately preceding purchase earned an average amount per annum at least equal to six percent (6%) of the par value of its capital stock (or, in the case of stock having no par value, of the issued or stated value of such stock) outstanding at date of purchase, but the conditions and limitations of this paragraph shall not apply to the special area of investment to which paragraph 23 of this section pertains.
    13.(A) Stock or shares of any mutual fund that:
        (a) has been in existence for a period of at least five (5) years immediately preceding the date of purchase, has assets of not less than twenty-five million dollars ($25,000,000) at the date of purchase, and invests substantially all of its assets in investments permitted under this section; or
        (b) is a class one money market mutual fund or a class one bond mutual fund.
Investments authorized by this paragraph 13(A) in mutual funds having the same or affiliated investment advisers shall not at any one (1) time exceed in the aggregate ten percent (10%) of the life insurance

company's admitted assets. The limitations contained in paragraph 22 of this subsection apply to investments in the types of mutual funds described in subparagraph (a). For the purposes of this paragraph, "class one bond mutual fund" means a mutual fund that at all times qualifies for investment using the bond class one reserve factor under the "Purposes and Procedures of the Securities Valuation Office" or any successor publication.
    The aggregate amount of investments under this paragraph may be limited by the commissioner if the commissioner finds that investments under this paragraph may render the operation of the life insurance company hazardous to the company's policyholders or creditors or to the general public.
    14. Loans upon the pledge of any of the investments described in this section other than real estate and those qualifying solely under paragraph 20 of this subsection, but the amount of such a loan shall not exceed seventy-five percent (75%) of the value of the investment pledged.
    15. Real estate acquired or otherwise lawfully held under the provisions of IC 27-1, except under paragraph 7 or 8 of this subsection, which real estate as an investment shall also include the value of improvements or betterments made thereon subsequent to its acquisition. The value of such real estate for deposit and statement purposes is to be determined in a manner satisfactory to the department.
    15.(A) Tangible personal property, equipment trust obligations, or other instruments evidencing an ownership interest or other interest in tangible personal property when the life insurance company purchasing such property has admitted assets in excess of twenty-five million dollars ($25,000,000), and where there is a right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use of such personal property from a corporation whose obligations would be eligible for investment under the provisions of paragraph 11 of this subsection, provided that the aggregate of such payments together with the estimated salvage value of such property at the end of its minimum useful life, to be determined in a manner acceptable to the insurance commissioner, and the estimated tax benefits to the insurer resulting from ownership of such property, is adequate to return the cost of the investment in such property, and provided further, that

each net investment in tangible personal property for which any single private corporation is obligated to pay rental, purchase, or other obligatory payments thereon does not exceed one-half of one percent (1/2%) of the life insurance company's admitted assets, and the aggregate net investments made under the provisions of this paragraph do not exceed five percent (5%) of the life insurance company's admitted assets.
    16. Loans to policyholders of the life insurance company in amounts not exceeding in any case the reserve value of the policy at the time the loan is made.
    17. A life insurance company doing business in a foreign jurisdiction may, if permitted or required by the laws of such jurisdiction, invest funds equal to its obligations in such jurisdiction in investments legal for life insurance companies domiciled in such jurisdiction or doing business therein as alien companies.
    17.(A) Investments in (i) obligations issued, guaranteed, assumed, or supported by a foreign jurisdiction or by a business entity organized under the laws of a foreign jurisdiction and (ii) preferred stock and common stock issued by any such business entity, if the obligations of such foreign jurisdiction or business entity, as appropriate, are rated:
        (a) BBB- or higher by Standard & Poor's Corporation (or A-2 or higher in the case of commercial paper);
        (b) Baa 3 or higher by Moody's Investors Service, Inc. (or P-2 or higher in the case of commercial paper);
        (c) BBB- or higher by Duff and Phelps, Inc. (or D-2 or higher in the case of commercial paper); or
        (d) 1 or 2 by the Securities Valuation Office.
If the obligations issued by a business entity organized under the laws of a foreign jurisdiction have not received a rating, investments may nevertheless be made under this paragraph in such obligations and in the preferred and common stock of the business entity if the earnings available for fixed charges of the business entity for a period of five (5) fiscal years preceding the date of purchase have averaged at least three (3) times its average fixed charges applicable to such period, and if during either of the last two (2) years of such period, the earnings available for fixed charges were at least three (3) times its fixed charges for such year. in Investments authorized by this paragraph in a single foreign jurisdiction shall not exceed ten percent (10%) of the

life insurance company's admitted assets. Subject to section 2.2(g) of this chapter, investments authorized by this paragraph denominated in foreign currencies shall not in the aggregate exceed ten percent (10%) of a life insurance company's admitted assets, and investments in any one (1) foreign currency shall not exceed five percent (5%) of the life insurance company's admitted assets. Investments authorized by this paragraph and paragraph 17(B) shall not in the aggregate exceed twenty percent (20%) of the life insurance company's admitted assets. This paragraph in no way limits or restricts investments which are otherwise specifically eligible for deposit under this section.
    17.(B) Investments in:
        (a) obligations issued, guaranteed, or assumed by a foreign jurisdiction or by a business entity organized under the laws of a foreign jurisdiction; and
        (b) preferred stock and common stock issued by a business entity organized under the laws of a foreign jurisdiction;
which investments are not eligible for investment under paragraph 17.(A).
    Investments authorized by this paragraph 17(B) shall not in the aggregate exceed five percent (5%) of the life insurance company's admitted assets. Subject to section 2.2(g) of this chapter, if investments authorized by this paragraph 17(B) are denominated in a foreign currency, the investments shall not, as to such currency, exceed two percent (2%) of the life insurance company's admitted assets. Investments authorized by this paragraph 17(B) in any one (1) foreign jurisdiction shall not exceed two percent (2%) of the life insurance company's admitted assets.
    Investments authorized by paragraph 17(A) of this subsection and this paragraph 17(B) shall not in the aggregate exceed twenty percent (20%) of the life insurance company's admitted assets.
    18. To protect itself against loss, a company may in good faith receive in payment of or as security for debts due or to become due, investments or property which do not conform to the categories, conditions, limitations, and standards set out above.
    19. A life insurance company may purchase for its own benefit any of its outstanding annuity or insurance contracts or other obligations and the claims of holders thereof.
    20. A life insurance company may make investments although not

conforming to the categories, conditions, limitations, and standards contained in paragraphs 1 through 11, 12 through 19, and 29 through 30.(A) of this subsection, but limited in aggregate amount to the lesser of:
        (a) ten percent (10%) of the company's admitted assets; or
        (b) the aggregate of the company's capital, surplus, and contingency reserves reported on the statutory financial statement of the insurer most recently required to be filed with the commissioner.
    This paragraph 20 does not apply to investments authorized by paragraph 11.(A) of this subsection.
    20.(A) Investments under paragraphs 1 through 20 and paragraphs 29 through 30.(A) of this subsection are subject to the general conditions, limitations, and standards contained in paragraphs 21 through 28 of this subsection.
    21. Investments in obligations (other than real estate mortgage indebtedness) and capital stock of, and in real estate and tangible personal property leased to, a single corporation, shall not exceed two percent (2%) of the life insurance company's admitted assets, taking into account the provisions of section 2.2(h) of this chapter. The conditions and limitations of this paragraph shall not apply to investments under paragraph 13(A) of this subsection or the special area of investment to which paragraph 23 of this subsection pertains.
    22. Investments in:
        (a) preferred stock; and
        (b) common stock;
shall not, in the aggregate, exceed twenty percent (20%) of the life insurance company's admitted assets, exclusive of assets held in segregated accounts of the nature defined in class 1(c) of IC 27-1-5-1. These limitations shall not apply to investments for the special purposes described in paragraph 23 of this subsection nor to investments in connection with segregated accounts provided for in class 1(c) of IC 27-1-5-1.
    23. Limitations defined in paragraphs 13, 20, 21, 22, and 26 of this subsection upon the right of a life insurance company to invest in obligations, and capital stock, of corporations shall be inapplicable when, within IC 27-2-9, the result of such investment, whether in one (1) or more transactions, is to effect, between a life insurance company

and another company, a relationship of primary and subsidiary companies, or to enlarge a life insurance company's investment in its subsidiary insurance company. However, except as otherwise provided in IC 27-2-9-3(e), the total of a life insurance company's investments in a company or companies to which it stands in the relation of primary company shall not at any time exceed ten percent (10%) of its admitted assets. In the event that a primary and subsidiary relationship ceases to exist between a life insurance company and another company, the life insurance company shall have until December 31 of the succeeding calendar year and such additional period of time as the commissioner may determine within which to conform its investments in stocks and securities of such other company to the conditions and limitations defined in this section, exclusive of this paragraph. Investments in subsidiary companies must be made in accordance with IC 27-1-23-2.6.
    24. No investment, other than commercial bank deposits and loans on life insurance policies, shall be made unless authorized by the life insurance company's board of directors or a committee designated by the board of directors and charged with the duty of supervising loans or investments.
    25. No life insurance company shall subscribe to or participate in any syndicate or similar underwriting of the purchase or sale of securities or property or enter into any transaction for such purchase or sale on account of said company, jointly with any other corporation, firm, or person, or enter into any agreement to withhold from sale any of its securities or property, but the disposition of its assets shall at all times be within its control. Nothing contained in this paragraph shall be construed to invalidate or prohibit an agreement by two (2) or more companies to join and share in the purchase of investments for bona fide investment purposes.
    26. No life insurance company may invest in the stocks or obligations, except investments under paragraphs 9 and 10 of this subsection, of any corporation in which an officer of such life insurance company is either an officer or director. However, this limitation shall not apply with respect to such investments in:
        (a) a corporation which is a subsidiary or affiliate of such life insurance company; or
        (b) a trade association, provided such investment meets the

requirements of paragraph 5 of this subsection.
    27. Except for the purpose of mutualization provided for in section 23 of this chapter, or for the purpose of retirement of outstanding shares of capital stock pursuant to amendment of its articles of incorporation, or in connection with a plan approved by the commissioner for purchase of such shares by the life insurance company's officers, employees, or agents, no life insurance company shall invest in its own stock.
    28. In applying the conditions, limitations, and standards prescribed in paragraphs 11, 12, and 13 of this subsection to the stocks or obligations of a corporation which in the seven (7) year period preceding purchase of such stocks or obligations acquired its property or a substantial part thereof through consolidation, merger, or purchase, the earnings of the several predecessors or constituent corporations shall be consolidated.
    29. A. Before a life insurance company may engage in securities lending transactions, repurchase transactions, reverse repurchase transactions, or dollar roll transactions, the life insurance company's board of directors must adopt a written plan that includes guidelines and objectives to be followed, including the following:
        (1) A description of how cash received will be invested or used for general corporate purposes of the company.
        (2) Operational procedures for managing interest rate risk, counterparty default risk, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction.
        (3) A statement of the extent to which the company may engage in securities lending transactions, repurchase transactions, reverse repurchase transactions, and dollar roll transactions.
    B. A life insurance company must enter into a written agreement for all transactions authorized by this paragraph, other than dollar roll transactions. The written agreement:
        (1) must require the termination of each transaction not more than one (1) year after its inception or upon the earlier demand of the company; and
        (2) must be with the counterparty business entity, except that, for securities lending transactions, the agreement may be with an agent acting on behalf of the life insurance company if:
            (A) the agent is:


                (i) a business entity, the obligations of which are rated BBB- or higher by Standard & Poor's Corporation (or A-2 or higher in the case of commercial paper), Baa3 or higher by Moody's Investors Service, Inc. (or P-2 or higher in the case of commercial paper), BBB- or higher by Duff and Phelps, Inc. (or D-2 or higher in the case of commercial paper), or 1 or 2 by the Securities Valuation Office;
                (ii) a business entity that is a primary dealer in United States government securities, recognized by the Federal Reserve Bank of New York; or
                (iii) any other business entity approved by the commissioner; and
            (B) the agreement requires the agent to enter into with each counterparty separate agreements that are consistent with the requirements of this paragraph.
    C. Cash received in a transaction under this paragraph shall be:
        (1) invested:
            (A) in accordance with this section 2; and
            (B) in a manner that recognizes the liquidity needs of the transaction; or
        (2) used by the life insurance company for its general corporate purposes.
    D. For as long as a transaction under this paragraph remains outstanding, the life insurance company or its agent or custodian shall maintain, as to acceptable collateral received in the transaction, either physically or through book entry systems of the Federal Reserve, the Depository Trust Company, the Participants Trust Company, or another securities depository approved by the commissioner:
        (1) possession of the acceptable collateral;
        (2) a perfected security interest in the acceptable collateral; or
        (3) in the case of a jurisdiction outside the United States:
            (A) title to; or
            (B) rights of a secured creditor to;
        the acceptable collateral.
    E. The limitations set forth in paragraphs 17 and 21 of this subsection do not apply to transactions under this paragraph 29. For purposes of calculations made to determine compliance with this paragraph, no effect may be given to the future obligation of the life

insurance company to:
        (1) resell securities, in the case of a repurchase transaction; or
        (2) repurchase securities, in the case of a reverse repurchase transaction.
    F. A life insurance company shall not enter into a transaction under this paragraph if, as a result of the transaction, and after giving effect to the transaction:
        (1) the aggregate amount of securities then loaned, sold to, or purchased from any one (1) business entity under this paragraph would exceed five percent (5%) of the company's admitted assets (but in calculating the amount sold to or purchased from a business entity under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement); or
        (2) the aggregate amount of all securities then loaned, sold to, or purchased from all business entities under this paragraph would exceed forty percent (40%) of the admitted assets of the company (provided, however, that this limitation does not apply to a reverse repurchase transaction if the borrowing is used to meet operational liquidity requirements resulting from an officially declared catastrophe and is subject to a plan approved by the commissioner).
    G. The following collateral requirements apply to all transactions under this paragraph:
        (1) In a securities lending transaction, the life insurance company must receive acceptable collateral having a market value as of the transaction date at least equal to one hundred two percent (102%) of the market value of the securities loaned by the company in the transaction as of that date. If at any time the market value of the acceptable collateral received from a particular business entity is less than the market value of all securities loaned by the company to that business entity, the business entity shall be obligated to deliver additional acceptable collateral to the company, the market value of which, together with the market value of all acceptable collateral then held in connection with all securities lending transactions with that business entity, equals at least one hundred two percent (102%) of the market value of the loaned securities.


        (2) In a reverse repurchase transaction, other than a dollar roll transaction, the life insurance company must receive acceptable collateral having a market value as of the transaction date equal to at least ninety-five percent (95%) of the market value of the securities transferred by the company in the transaction as of that date. If at any time the market value of the acceptable collateral received from a particular business entity is less than ninety-five percent (95%) of the market value of all securities transferred by the company to that business entity, the business entity shall be obligated to deliver additional acceptable collateral to the company, the market value of which, together with the market value of all acceptable collateral then held in connection with all reverse repurchase transactions with that business entity, equals at least ninety-five percent (95%) of the market value of the transferred securities.
        (3) In a dollar roll transaction, the life insurance company must receive cash in an amount at least equal to the market value of the securities transferred by the company in the transaction as of the transaction date.
        (4) In a repurchase transaction, the life insurance company must receive acceptable collateral having a market value equal to at least one hundred two percent (102%) of the purchase price paid by the company for the securities. If at any time the market value of the acceptable collateral received from a particular business entity is less than one hundred percent (100%) of the purchase price paid by the life insurance company in all repurchase transactions with that business entity, the business entity shall be obligated to provide additional acceptable collateral to the company, the market value of which, together with the market value of all acceptable collateral then held in connection with all repurchase transactions with that business entity, equals at least one hundred two percent (102%) of the purchase price. Securities acquired by a life insurance company in a repurchase transaction shall not be:
            (A) sold in a reverse repurchase transaction;
            (B) loaned in a securities lending transaction; or
            (C) otherwise pledged.
    30. A life insurance company may invest in obligations or interests

in trusts or partnerships regardless of the issuer, which are secured by:
        (a) investments authorized by paragraphs 1, 2, 3, 4, or 11 of this subsection; or
        (b) collateral with the characteristics and limitations prescribed for loans under paragraph 5 of this subsection.
For the purposes of this paragraph 30, collateral may be substituted for other collateral if it is in the same amount with the same or greater interest rate and qualifies as collateral under subparagraph (a) or (b) of this paragraph.
    30.(A) A life insurance company may invest in obligations or interests in trusts or partnerships, regardless of the issuer, secured by any form of collateral other than that described in subparagraphs (a) and (b) of paragraph 30 of this subsection, which obligations or interests in trusts or partnerships are rated:
        (a) A- or higher by Standard & Poor's Corporation or Duff and Phelps, Inc.;
        (b) A 3 or higher by Moody's Investor Service, Inc.; or
        (c) 1 by the Securities Valuation Office.
Investments authorized by this paragraph may not exceed ten percent (10%) of the life insurance company's admitted assets.
    31.A. A life insurance company may invest in short-term pooling arrangements as provided in this paragraph.
    B. The following definitions apply throughout this paragraph:
        (1) "Affiliate" means, as to any person, another person that, directly or indirectly through one (1) or more intermediaries, controls, is controlled by, or is under common control with the person.
        (2) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or non-management services), or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent (10%) or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The commissioner

may determine, after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.
        (3) "Qualified bank" means a national bank, state bank, or trust company that at all times is not less than adequately capitalized as determined by standards adopted by United States banking regulators and that is either regulated by state banking laws or is a member of the Federal Reserve System.
    C. A life insurer may participate in investment pools qualified under this paragraph that invest only in:
        (1) obligations that are rated BBB- or higher by Standard & Poor's Corporation (or A-2 or higher in the case of commercial paper), Baa 3 or higher by Moody's Investors Service, Inc. (or P-2 or higher in the case of commercial paper), BBB- or higher by Duff and Phelps, Inc. (or D-2 or higher in the case of commercial paper), or 1 or 2 by the Securities Valuation Office, and have:
            (A) a remaining maturity of three hundred ninety-seven (397) days or less or a put that entitles the holder to receive the principal amount of the obligation which put may be exercised through maturity at specified intervals not exceeding three hundred ninety-seven (397) days; or
            (B) a remaining maturity of three (3) years or less and a floating interest rate that resets not less frequently than quarterly on the basis of a current short-term index (for example, federal funds, prime rate, treasury bills, London InterBank Offered Rate (LIBOR) or commercial paper) and is not subject to a maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes;
        (2) government money market mutual funds or class one money market mutual funds; or
        (3) securities lending, repurchase, and reverse repurchase and dollar roll transactions that meet the requirements of paragraph 29 of this subsection and any applicable regulations of the department;
provided that the investment pool shall not acquire investments in any one (1) business entity that exceed ten percent (10%) of the total assets

of the investment pool.
    D. For an investment pool to be qualified under this paragraph, the investment pool shall not:
        (1) acquire securities issued, assumed, guaranteed, or insured by the life insurance company or an affiliate of the company; or
        (2) borrow or incur any indebtedness for borrowed money, except for securities lending, reverse repurchase, and dollar roll transactions that meet the requirements of paragraph 29 of this subsection.
    E. A life insurance company shall not participate in an investment pool qualified under this paragraph if, as a result of and after giving effect to the participation, the aggregate amount of participation then held by the company in all investment pools under this paragraph and section 2.4 of this chapter would exceed thirty-five percent (35%) of its admitted assets.
    F. For an investment pool to be qualified under this paragraph:
        (1) the manager of the investment pool must:
            (A) be organized under the laws of the United States, a state or territory of the United States, or the District of Columbia, and designated as the pool manager in a pooling agreement; and
            (B) be the life insurance company, an affiliated company, a business entity affiliated with the company, or a qualified bank or a business entity registered under the Investment Advisors Act of 1940 (15 U.S.C. 80a-I et seq.);
        (2) the pool manager or an entity designated by the pool manager of the type set forth in subdivision (1) of this subparagraph F shall compile and maintain detailed accounting records setting forth:
            (A) the cash receipts and disbursements reflecting each participant's proportionate participation in the investment pool;
            (B) a complete description of all underlying assets of the investment pool (including amount, interest rate, maturity date (if any) and other appropriate designations); and
            (C) other records which, on a daily basis, allow third parties to verify each participant's interest in the investment pool; and
        (3) the assets of the investment pool shall be held in one (1) or more accounts, in the name of or on behalf of the investment pool, under a custody agreement or trust agreement with a qualified bank, which must:


            (A) state and recognize the claims and rights of each participant;
            (B) acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its participation in the investment pool; and
            (C) contain an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the qualified bank or any other person.
    G. The pooling agreement for an investment pool qualified under this paragraph must be in writing and must include the following provisions:
        (1) Insurers, subsidiaries, or affiliates of insurers holding interests in the pool, or any pension or profit sharing plan of such insurers or their subsidiaries or affiliates, shall, at all times, hold one hundred percent (100%) of the interests in the investment pool.
        (2) The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person.
        (3) In proportion to the aggregate amount of each pool participant's interest in the investment pool:
            (A) each participant owns an undivided interest in the underlying assets of the investment pool; and
            (B) the underlying assets of the investment pool are held solely for the benefit of each participant.
        (4) A participant or (in the event of the participant's insolvency, bankruptcy, or receivership) its trustee, receiver, or other successor-in-interest may withdraw all or any portion of its participation from the investment pool under the terms of the pooling agreement.
        (5) Withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter. Payments upon withdrawals under this paragraph shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide for such payments to be made to the participants in one (1) of the following forms, at the discretion of the pool manager:
            (A) in cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;
            (B) in kind, a pro rata share of each underlying asset; or
            (C) in a combination of cash and in kind distributions, a pro rata share in each underlying asset.
        (6) The records of the investment pool shall be made available for inspection by the commissioner.
SOURCE: IC 27-1-17-4; (01)CR038601.9. -->     SECTION 9. IC 27-1-17-4 , AS AMENDED BY P.L.268-1999, SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 4. Whenever a foreign or an alien insurance company desires to be admitted to do an insurance business in this state, it shall execute in the English language and present the following to the department, at its office, accompanied by the fees prescribed by law:
        (a) 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.
        (b) An application for admission, executed in the manner provided in this chapter, setting forth:
            (1) the name of such company;
            (2) the location of its principal office or place of business without this state;
            (3) the names of the states in which it has been admitted or qualified to do business;
            (4) 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 ;
            (5) 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;
            (6) 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;
            (7) 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
            (8) 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.
        (c) 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.
        (d) 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.
        (e) 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.
        (f) A copy of its bylaws or regulations, if any, certified to by the secretary or similar officer of the insurance company.
        (g) Copies of forms of all policies which the insurance company proposes to issue in this state and also copies of the forms of application for such policies.
        (h) (g) 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 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.


        (i) (h) 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.
SOURCE: IC 27-1-23-1; (01)CR038601.10. -->     SECTION 10. IC 27-1-23-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1. As used in this chapter, the following terms shall have the respective meanings set forth in this section, unless the context shall otherwise require:
    (a) An "acquiring party" is the specific person by whom an acquisition of control of a domestic insurer or of any corporation controlling a domestic insurer is to be effected, and each person who directly, or indirectly through one (1) or more intermediaries, controls the person specified.
    (b) An "affiliate" of, or person "affiliated" with, a specific person, is a person that directly, or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
    (c) A "beneficial owner" of a voting security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, revocable or irrevocable proxy, or otherwise has or shares:
        (1) voting power including the power to vote, or to direct the voting of, the security; or
        (2) investment power which includes the power to dispose, or to direct the disposition, of the security.
    (d) "Commissioner" means the insurance commissioner of this state.
    (e) "Control" (including the terms "controlling", "controlled by", and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the beneficial ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office. Control shall be presumed to exist if any person beneficially owns ten percent (10%) or more of the voting securities of any other person. The commissioner may determine this presumption has been rebutted only by a showing

made in the manner provided by section 3(k) of this chapter that control does not exist in fact, after giving all interested persons notice and an opportunity to be heard. Control shall be presumed again to exist upon the acquisition of beneficial ownership of each additional five percent (5%) or more of the voting securities of the other person. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard, that control exists in fact, notwithstanding the absence of a presumption to that effect.
    (f) "Department" means the department of insurance created by IC 27-1-1-1.
    (g) A "domestic insurer" is an insurer organized under the laws of this state.
    (h) "Earned surplus" means an amount equal to the unassigned funds of an insurer as set forth in the most recent annual statement of an insurer that is submitted to the commissioner, excluding surplus arising from unrealized capital gains or revaluation of assets.
    (i) An "insurance holding company system" consists of two (2) or more affiliated persons, one (1) or more of which is an insurer.
    (j) "Insurer" has the same meaning as set forth in IC 27-1-2-3 , except that it does not include:
        (1) agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state;
        (2) fraternal benefit societies; or
        (3) nonprofit medical and hospital service associations.
The term includes a health maintenance organization (as defined in IC 27-13-1-19 ) and a limited service health maintenance organization (as defined in IC 27-13-1-27 ).
    (k) A "person" is an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but shall not include any securities broker performing no more than the usual and customary broker's function.
    (l) A "policyholder" of a domestic insurer includes any person who owns an insurance policy or annuity contract issued by the domestic insurer, any person reinsured by the domestic insurer under a

reinsurance contract or treaty between the person and the domestic insurer, and any health maintenance organization with which the domestic insurer has contracted to provide services or protection against the cost of care.
    (m) A "subsidiary" of a specified person is an affiliate controlled by that person directly or indirectly through one or more intermediaries.
    (n) "Surplus" means the total of gross paid in and contributed surplus, special surplus funds, and unassigned surplus, less treasury stock at cost.
    (o) "Voting security" includes any security convertible into or evidencing a right to acquire a voting security.

SOURCE: IC 27-1-23-2.6; (01)CR038601.11. -->     SECTION 11. IC 27-1-23-2.6 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2.6. (a) As used in this section, "entity" means:
        (1) a sole proprietorship;
        (2) a corporation;
        (3) a limited liability company;
        (4) a partnership;
        (5) an association;
        (6) a joint stock company;
        (7) a mutual fund;
        (8) a joint venture;
        (9) a trust;
        (10) a joint tenancy;
        (11) an unincorporated organization; or
        (12) a similar entity.
    (b) As used in this section, "primary company" means a domestic insurance company that beneficially owns more than fifty percent (50%) of one (1) or more subsidiary companies.
    (c) As used in this section, "subsidiary company" means an entity of which more than fifty percent (50%) is beneficially owned by an insurance company.
    (d) As used in this section, "total investment of the primary company" means the total of:
        (1) a direct investment by a primary company in an asset; plus
        (2) the primary company's proportionate share of an

investment made by a subsidiary company of the primary company.
The primary company's proportionate share must be determined by multiplying the amount of the subsidiary company's investment by the percentage of the primary company's ownership interest in the subsidiary company.
    (e) A primary company may, independently or in cooperation with another person, organize or acquire one (1) or more subsidiary companies.
    (f) A subsidiary company of a primary company may conduct business of any kind, and the authority to conduct the business is not limited because of the status of the subsidiary company as a subsidiary company of the primary company.
    (g) In addition to investments in common stock, preferred stock, debt obligations, and other securities as permitted under IC 27-1-12-2 or IC 27-1-13-3 , a primary company to which this section applies may, directly or through one (1) or more subsidiary companies, also do the following:
        (1) Invest in common stock, preferred stock, debt obligations, and other securities of one (1) or more subsidiary companies, amounts that in total do not exceed the lesser of ten percent (10%) of the primary company's admitted assets or fifty percent (50%) of the primary company's surplus as regards policyholders, if, after the investments, the primary company's surplus as regards policyholders is reasonable in relation to the primary company's outstanding liabilities and adequate to the primary company's financial needs. In calculating the amount of investments permitted under this subdivision:
            (A) investments, whether made directly or through one (1) or more subsidiary companies, in domestic or foreign insurance subsidiary companies and health maintenance organizations must be excluded; and
            (B) to the extent that expenditures relate to an investment other than an investment described in clause (A), the following must be included:
                (i) Total net money or other consideration expended and obligations assumed in the acquisition or formation of a

subsidiary company, including all organizational expenses and contributions to capital and surplus of the subsidiary company, whether or not represented by the purchase of capital stock or issuance of other securities.
                (ii) All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus of a subsidiary company subsequent to the subsidiary company's acquisition or formation.
        (2) Notwithstanding subdivision (1), invest an amount in common stock, preferred stock, debt obligations, and other securities of one (1) or more subsidiary companies engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the primary company if the subsidiary company agrees to limit the subsidiary company's investment in an asset so that, when combined with the investments of the primary company, the total investment of the primary company will not exceed the investment limitations described in subdivision (1) or in any applicable provision of IC 27-1-12-2 or IC 27-1-13-3.
        (3) Notwithstanding subdivision (1), with the prior approval of the commissioner, invest a greater amount in common stock, preferred stock, debt obligations, or other securities of one (1) or more subsidiary companies if, after the investment, the primary company's surplus regarding policyholders is reasonable in relation to the primary company's outstanding liabilities and adequate to the primary company's financial needs.
    (h) Investments that are made under this section in common stock, preferred stock, debt obligations, or other securities of a subsidiary company are not subject to restrictions or prohibitions under IC 27-1-12-2 or IC 27-1-13-3 that otherwise apply to investments of primary companies.
    (i) Before a primary company to which this section applies makes an investment described in subsection (g), a primary company shall make a determination regarding whether the proposed investment meets the applicable requirements by determining the applicable investment limitations as though the

investment has been made, considering:
        (1) the currently outstanding principal balance on previous investments in debt obligations; and
        (2) the value of previous investments in equity securities as of the day that the investments in equity securities were made;
net of any return of capital invested.
    (j) If a primary company ceases to control a subsidiary company, the primary company shall dispose of any investment in the subsidiary company made under this section:
        (1) not more than three (3) years from the time of the cessation of control; or
        (2) within the period determined appropriate by the commissioner;
unless the investment meets the requirements for investment under any applicable provision of IC 27-1-12-2 or IC 27-1-13-3 and the primary company has notified the commissioner that the investment meets the requirements.

     (k) A primary company, at the time of establishing a subsidiary company, must possess:
        (1) assets of not less than twenty-five million dollars ($25,000,000); or
        (2) not less than three million five hundred thousand dollars ($3,500,000) of:
            (A) combined capital and surplus in the case of a stock company; and
            (B) surplus in the case of a mutual company.
    (l) The department has the power to:
        (1) conduct periodic examinations of a subsidiary company;
        (2) require reports that reflect the effect of the condition and operation of a subsidiary company on the financial condition of a primary company; and
        (3) make additional examinations or require other reports with respect to a subsidiary company that are necessary to carry out the purposes of this section.
A noninsurance subsidiary company shall annually furnish the department financial statements that are prepared under generally accepted accounting principles and certified by an independent certified public accountant, and the department may rely on the

statements. If a subsidiary company conducts the business of the subsidiary company in a manner that clearly tends to impair the capital or surplus fund of the primary company, or otherwise makes the operation of the primary company financially unsafe, the department may act under IC 27-1-3-19 with respect to the primary company.
    (m) A primary company and a subsidiary company shall, in all respects, stand before the law as separate and distinct companies and neither company is liable to the creditors, policyholders, or stockholders of the other company, acts or omissions of an officer, director, stockholder, or member of either company notwithstanding.
    (n) The board of directors and officers of a primary company and a subsidiary company may be identical. However, the affairs of each company shall be carried on separate and distinct from the other company.
    (o) A foreign subsidiary company shall be treated in the same manner as other foreign companies, except that the treatment may be withheld or suspended with respect to a subsidiary company that is domiciled in a state that does not treat a:
        (1) primary company; or
        (2) subsidiary company;
that is domiciled in Indiana in a manner equal to a foreign or domestic company doing business in the other state.
    (p) Interests in a subsidiary company that are owned by a primary company must be registered in the name of the primary company except for shares that are required under Indiana law to be registered in the name of another person.

SOURCE: IC 27-4-1-6; (01)CR038601.12. -->     SECTION 12. IC 27-4-1-6 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6. (a) If after a hearing under IC 4-21.5-3 , the commissioner determines that the method of competition or the act or practice in question is defined in section 4 of this chapter and that the person complained of has engaged in such method of competition, act, or practice in violation of this chapter, he shall reduce his findings to writing and shall issue and cause to be served on the person charged with the violation an order requiring such person to cease and desist from such method of competition, act, or practice, and the commissioner may at his

discretion order one (1) or more of the following:
        (1) Payment of a civil penalty of not more than twenty-five thousand dollars ($25,000) for each act or violation. but not to exceed an aggregate penalty of one hundred thousand dollars ($100,000) in any twelve (12) month period unless If the person knew or reasonably should have known that he was in violation of this chapter, in which case the penalty may be not more than fifty thousand dollars ($50,000) for each act or violation. but not to exceed an aggregate penalty of two hundred thousand dollars ($200,000) in any twelve (12) month period.
        (2) Suspension or revocation of the person's license, or certificate of authority, if he knew or reasonably should have known he was in violation of this chapter.
    (b) In determining the amount of a civil penalty under subsection (a)(1), the commissioner shall consider the remediation efforts undertaken by the person.
     (c) All civil penalties imposed and collected under this section shall be deposited in the state general fund.

SOURCE: IC 27-7-12; (01)CR038601.13. -->     SECTION 13. IC 27-7-12 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2002]:
    Chapter 12. Termination of Residential Policies
    Sec. 1. (a) This chapter applies to policies of insurance covering risks to property located in Indiana that take effect or are renewed after June 30, 2001, and that insure loss of or damage to:
        (1) real property consisting of not more than four (4) residential units, one (1) of which is the principal place of residence of the named insured; or
        (2) personal property:
            (A) in which the named insured has an insurable interest; and
            (B) that is used within a residential dwelling for personal, family, or household purposes.
    (b) This chapter does not apply to the following:
        (1) A policy of inland marine insurance.
        (2) The cancellation or nonrenewal of an automobile insurance policy under IC 27-7-6.
        (3) The cancellation or nonrenewal of a commercial property

and casualty insurance policy under IC 27-1-31-2.5.
    Sec. 2. (a) As used in this chapter, "cancellation" or "canceled" refers to a termination of property insurance coverage that occurs during the policy term.
    (b) As used in this chapter, "nonpayment of premium" means the failure of the named insured to discharge any obligation in connection with the payment of premiums on policies of insurance subject to this chapter, regardless of whether the payments are directly payable to the insurer or its agent or indirectly payable under a premium finance plan or extension of credit. The term includes the failure to pay dues or fees where payment of the dues or fees is a prerequisite to obtaining or continuing property insurance coverage.
    (c) As used in this chapter, "nonrenewal" or "nonrenewed" refers to a termination of property insurance coverage that occurs at the end of the policy term.
    (d) As used in this chapter, "renewal" or "to renew" refers to:
        (1) the issuance and delivery by an insurer at the end of a policy period of a policy superseding a policy previously issued and delivered by the same insurer; or
        (2) the issuance and delivery of a certificate or notice extending the term of an existing policy beyond its policy period or term.
    (e) As used in this chapter, "termination" means a cancellation or nonrenewal. The term does not include:
        (1) the requirement of a reasonable deductible;
        (2) reasonable changes in the amount of insurance; or
        (3) reasonable reductions in policy limits or coverage;
if the requirements or changes are directly related to the hazard involved and are made on the renewal date for the policy. The term does not include a transfer of a policy to another insurer.
    Sec. 3. (a) Notice of cancellation of property insurance coverage by an insurer must:
        (1) be in writing;
        (2) be delivered or mailed to the named insured at the last known address of the named insured;
        (3) state the effective date of the cancellation; and
        (4) upon request of the named insured, be accompanied by a

written explanation of the specific reasons for the cancellation.
    (b) An insurer shall provide written notice of cancellation to the named insured at least:
        (1) ten (10) days before canceling a policy, if the cancellation is for nonpayment of a premium;
        (2) twenty (20) days before canceling a policy, if the cancellation occurs more than sixty (60) days after the date of issuance of the policy; and
        (3) ten (10) days before canceling a policy, if the cancellation occurs not more than sixty (60) days after the date of issuance of the policy.
    (c) If the policy was procured by an independent agent licensed in Indiana, the insurer shall deliver or mail notice of cancellation to the agent not less than ten (10) days before the insurer delivers or mails the notice to the named insured, unless the obligation to notify the agent is waived in writing by the agent.
    Sec. 4. (a) Notice of nonrenewal by an insurer must:
        (1) be in writing;
        (2) be delivered or mailed to the named insured at the last known address of the named insured;
        (3) state the insurer's intention not to renew the policy upon expiration of the current policy period;
        (4) upon request of the named insured, be accompanied by a written explanation of the specific reasons for the nonrenewal; and
        (5) be provided to the named insured at least twenty (20) days before the expiration of the current policy period.
    (b) If the policy was procured by an independent agent licensed in Indiana, the insurer shall deliver or mail notice of nonrenewal to the agent not less than ten (10) days before the insurer delivers or mails the notice to the named insured, unless the obligation to notify the agent is waived in writing by the agent.
    (c) If an insurer mails or delivers to an insured a renewal notice, bill, certificate, or policy indicating the insurer's willingness to renew a policy and the insured does not respond, the insurer is not required to provide to the insured notice of intention not to renew.
    Sec. 5. (a) A written explanation provided under section 3 or 4

of this chapter must be of sufficient clarity and specificity to enable a reasonable lay person to identify the basis for the insurer's decision without further inquiry.
    (b) If notice is not provided under section 4 of this chapter, coverage is considered to be renewed only for the ensuing policy period upon payment of the appropriate premiums under the same terms and conditions, and subject to section 6 of this chapter, unless the named insured has accepted replacement coverage with another insurer or unless the named insured has agreed to the nonrenewal.
    Sec. 6. After coverage has been in effect for more than sixty (60) days or after the effective date of a renewal policy, a notice of cancellation may not be issued unless cancellation is based on at least one (1) of the following:
        (1) Nonpayment of a premium.
        (2) Discovery of fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy, or in presenting a claim under the policy.
        (3) Discovery of willful or reckless acts or omissions on the part of the named insured that increase a hazard insured against.
        (4) The occurrence of a change in the risk that substantially increases a hazard insured against after insurance coverage has been issued or renewed.
        (5) A violation of any local fire, health, safety, building, or construction regulation or ordinance with respect to an insured property or the occupancy of the property that substantially increases any hazard insured against.
        (6) A determination by the insurance commissioner that the continuation of the policy would place the insurer in violation of the insurance laws of Indiana.
        (7) Real property taxes owing on the insured property have been delinquent for two (2) or more years and continue to be delinquent at the time notice of cancellation is issued.
    Sec. 7. Termination of property insurance coverage by an insurer is prohibited if the termination is based on any of the following:


        (1) Upon the race, religion, nationality, ethnic group, age, sex, or marital status of the applicant or named insured.
        (2) Solely upon the lawful occupation or profession of the applicant or named insured. However, this subdivision does not apply to an insurer that limits its market to one (1) lawful occupation or profession or to several related lawful occupations or professions.
        (3) Upon the age or location of the residence of the applicant or named insured, unless that decision is for a business purpose that is not a mere pretext for a decision based on factors prohibited in this chapter or any other provision of this title.
        (4) Upon the fact that another insurer previously declined to insure the applicant or terminated an existing policy in which the applicant was the named insured.
        (5) Upon the fact that the applicant or named insured previously obtained insurance coverage through a residual market insurance mechanism.
    Sec. 8. The named insured must be given notice of a transfer of a policy, including a transfer between insurers within the same insurance group. The notice must:
        (1) be in writing;
        (2) be delivered or mailed to the named insured at the last known address of the named insured;
        (3) be provided to the named insured at least twenty (20) days before the transfer; and
        (4) identify the insurer to which the policy will be transferred.
    Sec. 9. (a) The following persons are immune from civil liability for any communication giving notice of or specifying the reasons for a termination or for any statement made in connection with an attempt to discover or verify the existence of conditions that would be a reason for a termination under this chapter:
        (1) Employees of the department of insurance.
        (2) An insurer or its authorized representative, agent, or employee.
        (3) A licensed insurance agent.
        (4) A person furnishing information to an insurer as to reasons for a termination.
    (b) This section does not apply to statements made in bad faith with malice in fact.

SOURCE: IC 27-7-13; (01)CR038601.14. -->     SECTION 14. IC 27-7-13 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2002]:
    Chapter 13. Required Notice of Flood Coverage in a Residential Policy
    Sec. 1. (a) This chapter applies to policies of insurance covering risks to property located in Indiana that are issued or renewed after December 31, 2001, and that insure against loss of or damage to:
        (1) real property consisting of not more than four (4) residential units, one (1) of which is the principal place of residence of the named insured; or
        (2) personal property:
            (A) in which the named insured has an insurable interest; and
            (B) that is used within a residential dwelling for personal, family, or household purposes.
    (b) This chapter does not apply to the following:
        (1) A policy of inland marine insurance.
        (2) An automobile insurance policy under IC 27-7-6.
        (3) A commercial property and casualty insurance policy under IC 27-1-31.
    Sec. 2. If a policy of insurance described in section 1 of this chapter does not provide coverage for flood damage:
        (1) the policy jacket must contain a prominently printed notice stating; or
        (2) the policyholder must be given written notice when the policy is issued, or upon the first renewal after December 31, 2001;
that coverage for flood damage may be available through the National Flood Insurance Program.

SOURCE: IC 27-8-8-2; (01)CR038601.15. -->     SECTION 15. IC 27-8-8-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 2. (a) As used in this chapter:
    "Account" means one of the three (3) accounts created under section 3 of this chapter.
    "Association" means the Indiana life and health insurance guaranty association created under section 3 of this chapter.
    "Commissioner" refers to the commissioner of insurance.
    "Contractual obligation" means an obligation under covered policies.
    "Covered policy" means any policy or contract that is of a type described in section 1(a) of this chapter and is not excluded by section 1(b) of this chapter.
    "Impaired insurer" means a member insurer deemed by the commissioner to be potentially unable to fulfill its contractual obligations.
    "Insolvent insurer" means a member insurer who becomes insolvent and is placed under a final order of liquidation, rehabilitation, or conservation by a court.
    "Member insurer" means any person that is licensed or holds a certificate of authority to transact in Indiana any kind of insurance for which coverage is provided under this chapter. The term includes any insurer whose license or 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 medical and hospital 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 A mandatory state pooling plan or arrangement.
        (5) An assessment company or any other person that operates an assessment plan (as defined in IC 27-1-2-3 (y)).
        (6) An interinsurance exchange authorized by IC 27-6-6.
        (7) A prepaid limited health service organization or a limited service health maintenance organization under IC 27-13-34.
        (8) A special service health care delivery plan under IC 27-8-7.
        (9) (8) A farmer's mutual insurance company under IC 27-5.
        (10) (9) Any person similar to any person described in subdivisions (1) through (9). (8).
    "Premiums" means direct gross insurance premiums and annuity considerations received on covered policies, less return premiums and considerations, and dividends paid or credited to policyholders on direct business. It does not include premiums and considerations on

contracts between insurers and reinsurers. For purposes of assessments made under section 6 of this chapter, "premiums" for covered policies shall not be reduced on account of any limitation on benefits for which the association is obligated under section 5(l) of this chapter. However, "premiums" for assessment purposes does not include that portion of any premium exceeding five million dollars ($5,000,000) for any one (1) unallocated annuity contract.
    "Person" means any natural person, corporation, limited liability company, partnership, association, voluntary organization, trust, governmental organization or entity, or other business organization or entity.
    "Resident" means any person who resides in Indiana at the time the association becomes obligated for an impaired or insolvent insurer. Persons other than natural persons are considered to reside in the state where their principal place of business is located.
    "Unallocated annuity contract" means an annuity contract or group annuity certificate that is not issued to and held by a natural person (excluding a natural person acting as a trustee), except to the extent of any annuity benefits guaranteed to a natural person by an insurer under the contract or certificate. For the purposes of section 1.5 of this chapter, an unallocated annuity contract shall not be considered a group covered policy.
    (b) For purposes of this chapter, a policy, contract, or certificate is considered to be held by the person identified on the policy, contract, or certificate as the holder or owner of the policy, contract, or certificate.

SOURCE: IC 27-8-15-28; (01)CR038601.16. -->     SECTION 16. IC 27-8-15-28 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 28. (a) As used in this section, "health insurance plan" means coverage provided under any of the following:
        (1) A hospital or medical expense incurred policy or certificate.
        (2) A hospital or medical service plan contract.
        (3) A health maintenance organization subscriber contract.
        (4) Medicare or Medicaid.
        (5) An employer based health insurance arrangement.
        (6) An individual health insurance policy.
        (7) A policy issued by the Indiana comprehensive health insurance association under IC 27-8-10.
        (8) (7) An employee welfare benefit plan (as defined in 29 U.S.C. 1002) that is self-funded.
        (9) (8) A conversion policy issued under section 31 or 31.1 of this chapter.
    (b) Except as provided in section 29 of this chapter, a small employer insurer shall waive the exclusion period described in section 27 of this chapter applicable to a preexisting condition or the limitation period with respect to a particular service in a health insurance plan for the time an eligible employee or a dependent of an eligible employee was previously covered by a health insurance plan if the following conditions are met:
        (1) The eligible employee or a dependent of the eligible employee was previously covered by a health insurance plan that provided benefits with respect to the particular service.
        (2) Coverage under the health insurance plan was continuous to a date not more than sixty-three (63) days before the effective date of enrollment by:
            (A) the eligible employee; or
            (B) a dependent of the eligible employee.
    (c) In determining whether an eligible employee or a dependent of the eligible employee meets the requirements of subsection (b)(2), a waiting period imposed by a small employer insurer or small employer before new coverage may become effective must be excluded from the calculation.
    (d) This section does not preclude the application of any waiting period applicable to all new enrollees under a plan.
SOURCE: IC 27-8-17-12; (01)CR038601.17. -->     SECTION 17. IC 27-8-17-12 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 12. (a) A utilization review agent shall make available upon request to an enrollee at the time an adverse utilization review determination is made, and to a provider of record upon request:
        (1)
a written description of the appeals procedure by which an enrollee or a provider of record may obtain a review of a appeal the utilization review determination by the utilization review agent; and
        (2) in the case of an enrollee covered under an accident and sickness policy or a health maintenance organization contract described in subsection (d), notice that the enrollee has the

right to appeal the utilization review determination under IC 27-8-28 or IC 27-13-10 and the toll free telephone number that the enrollee may call to request a review of the determination or obtain further information about the right to appeal.
    (b) The appeals procedure provided by a utilization review agent must meet the following requirements:
        (1) On appeal, the determination not to certify an admission, a service, or a procedure as necessary or appropriate must be made by a health care provider licensed in the same discipline as the provider of record.
        (2) The determination of the appeal of a utilization review determination not to certify an admission, service, or procedure must be completed within thirty (30) days after:
            (A) the appeal is filed; and
            (B) all information necessary to complete the appeal is received.
    (c) A utilization review agent shall provide an expedited appeals process for emergency or life threatening situations. The determination of an expedited appeal under the process required by this subsection shall be made by a physician and completed within forty-eight (48) hours after:
        (1) the appeal is initiated; and
        (2) all information necessary to complete the appeal is received by the utilization review agent.
     (d) If an enrollee is covered under an accident and sickness insurance policy (as defined in IC 27-8-28-1 ) or a contract issued by a health maintenance organization (as defined in IC 27-13-1-19 ), the enrollee's exclusive right to appeal a utilization review determination is provided under IC 27-8-28 or IC 27-13-10 , respectively.
    (e) A utilization review agent shall make available upon request a written description of the appeals procedure that an enrollee or provider of record may use to obtain a review of a utilization review determination by the utilization review agent.

SOURCE: IC 27-8-28; (01)CR038601.18. -->     SECTION 18. IC 27-8-28 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]:
    Chapter 28. Internal Grievance Procedures
    Sec. 1. (a) As used in this chapter, "accident and sickness insurance policy" means an insurance policy that provides one (1) or more of the kinds of insurance described in Class 1(b) and 2(a) of IC 27-1-5-1.
    (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) Automobile medical payment insurance.
        (4) A specified disease policy issued as an individual policy.
        (5) A limited benefit health insurance policy issued as an individual policy.
        (6) A short term insurance plan that:
            (A) may not be renewed; and
            (B) has a duration of not more than six (6) months.
        (7) A policy that provides a stipulated daily, weekly, or monthly payment to an insured during hospital confinement without regard to the actual expense of the confinement.
        (8) Worker's compensation or similar insurance.
    Sec. 2. As used in this chapter, "commissioner" refers to the insurance commissioner appointed under IC 27-1-1-2.
    Sec. 3. As used in this chapter, "covered individual" means an individual who is covered under an accident and sickness insurance policy.
    Sec. 4. As used in this chapter, "department" refers to the department of insurance.
    Sec. 5. As used in this chapter, "external grievance" means the independent review under IC 27-8-29 of a grievance filed under this chapter.
    Sec. 6. As used in this chapter, "grievance" means any dissatisfaction expressed by or on behalf of a covered individual regarding:
        (1) a determination that a service or proposed service is not appropriate or medically necessary;
        (2) a determination that a service or proposed service is experimental or investigational;
        (3) the availability of participating providers;
        (4) the handling or payment of claims for health care services; or
        (5) matters pertaining to the contractual relationship between:
            (A) a covered individual and an insurer; or
            (B) a group policyholder and an insurer;
and for which the covered individual has a reasonable expectation that action will be taken to resolve or reconsider the matter that is the subject of dissatisfaction.
    Sec. 7. As used in this chapter, "grievance procedure" means a written procedure established and maintained by an insurer for filing, investigating, and resolving grievances and appeals.
    Sec. 8. As used in this chapter, "insured" means:
        (1) an individual whose employment status or other status except family dependency is the basis for coverage under a group accident and sickness insurance policy; or
        (2) in the case of an individual accident and sickness insurance policy, the individual in whose name the policy is issued.
    Sec. 9. As used in this chapter, "insurer" means any person who delivers or issues for delivery an accident and sickness insurance policy or certificate in Indiana.
    Sec. 10. An insurer shall establish and maintain a grievance procedure that complies with the requirements of this chapter for the resolution of grievances initiated by a covered individual.
    Sec. 11. The commissioner may examine the grievance procedure of an insurer.
    Sec. 12. An insurer shall maintain all grievance records received by the insurer after the most recent examination of the insurer's grievance procedure by the commissioner.
    Sec. 13. (a) An insurer shall provide timely, adequate, and appropriate notice to each insured of:
        (1) the grievance procedure required under this chapter;
        (2) the external grievance procedure required under IC 27-8-29 ;
        (3) information on how to file:
            (A) a grievance under this chapter; and
            (B) a request for an external grievance review under IC 27-8-29 ; and
        (4) a toll free telephone number through which a covered individual may contact the insurer at no cost to the covered individual to obtain information and to file a grievance.
    (b) An insurer shall prominently display on all notices to covered individuals the toll free telephone number and the address at which a grievance or request for external grievance review may be filed.
    Sec. 14. (a) A covered individual may file a grievance orally or in writing.
    (b) An insurer shall make available to covered individuals a toll free telephone number through which a grievance may be filed. The toll free telephone number must:
        (1) be staffed by a qualified representative of the insurer;
        (2) be available for at least forty (40) hours per week during normal business hours; and
        (3) accept grievances in the languages of the major population groups served by the insurer.
    (c) A grievance is considered to be filed on the first date it is received, either by telephone or in writing.
    Sec. 15. (a) An insurer shall establish procedures to assist covered individuals in filing grievances.
    (b) A covered individual may designate a representative to file a grievance for the covered individual and to represent the covered individual in a grievance under this chapter.
    Sec. 16. (a) An insurer shall establish written policies and procedures for the timely resolution of grievances filed under this chapter. The policies and procedures must include the following:
        (1) An acknowledgment of the grievance, oral or in writing, to the covered individual within five (5) business days after receipt of the grievance.
        (2) Documentation of the substance of the grievance and any actions taken.
        (3) An investigation of the substance of the grievance, including any aspects involving clinical care.
        (4) Notification to the covered individual of the disposition of the grievance and the right to appeal.
        (5) Standards for timeliness in:
            (A) responding to grievances; and
            (B) providing notice to covered individuals of:
                (i) the disposition of the grievance; and
                (ii) the right to appeal;
        that accommodate the clinical urgency of the situation.
    (b) An insurer shall appoint at least one (1) individual to resolve a grievance.
    (c) A grievance must be resolved as expeditiously as possible, but not more than twenty (20) business days after the grievance is filed. If an insurer is unable to make a decision regarding the grievance within the twenty (20) day period due to circumstances beyond the insurer's control, the insurer shall:
        (1) before the twentieth business day, notify the covered individual in writing of the reason for the delay; and
        (2) issue a written decision regarding the grievance within an additional ten (10) business days.
    (d) An insurer shall notify a covered individual in writing of the resolution of a grievance within five (5) business days after completing an investigation. The grievance resolution notice must include the following:
        (1) A statement of the decision reached by the insurer.
        (2) A statement of the reasons, policies, and procedures that are the basis of the decision.
        (3) Notice of the covered individual's right to appeal the decision.
        (4) The department, address, and telephone number through which a covered individual may contact a qualified representative to obtain additional information about the decision or the right to appeal.
    Sec. 17. (a) An insurer shall establish written policies and procedures for the timely resolution of appeals of grievance decisions. The procedures for registering and responding to oral and written appeals of grievance decisions must include the following:
        (1) Written or oral acknowledgment of the appeal not more than five (5) business days after the appeal is filed.
        (2) Documentation of the substance of the appeal and the actions taken.
        (3) Investigation of the substance of the appeal, including any

aspects of clinical care involved.
        (4) Notification to the covered individual:
            (A) of the disposition of an appeal; and
            (B) that the covered individual may have the right to further remedies allowed by law.
        (5) Standards for timeliness in:
            (A) responding to an appeal; and
            (B) providing notice to covered individuals of:
                (i) the disposition of an appeal; and
                (ii) the right to initiate an external grievance review under IC 27-8-29 ;
        that accommodate the clinical urgency of the situation.
    (b) In the case of an appeal of a grievance decision described in section 6(1) or 6(2) of this chapter, an insurer shall appoint a panel of one (1) or more qualified individuals to resolve an appeal. The panel must include one (1) or more individuals who:
        (1) have knowledge in the medical condition, procedure, or treatment at issue;
        (2) are licensed in the same profession and have a similar specialty as the provider who proposed or delivered the health care procedure, treatment, or service;
        (3) are not involved in the matter giving rise to the appeal or in the initial investigation of the grievance; and
        (4) do not have a direct business relationship with the covered individual or the health care provider who previously recommended the health care procedure, treatment, or service giving rise to the grievance.
    (c) An appeal of a grievance decision must be resolved:
        (1) as expeditiously as possible, reflecting the clinical urgency of the situation; and
        (2) in any case, not later than forty-five (45) days after the appeal is filed.
    (d) An insurer shall allow a covered individual the opportunity to:
        (1) appear in person before; or
        (2) if unable to appear in person, otherwise appropriately communicate with;
the panel appointed under subsection (b).


    (e) An insurer shall notify a covered individual in writing of the resolution of an appeal of a grievance decision within five (5) business days after completing the investigation. The appeal resolution notice must include the following:
        (1) A statement of the decision reached by the insurer.
        (2) A statement of the reasons, policies, and procedures that are the basis of the decision.
        (3) Notice of the covered individual's right to further remedies allowed by law, including the right to external grievance review by an independent review organization under IC 27-8-29.
        (4) The department, address, and telephone number through which a covered individual may contact a qualified representative to obtain more information about the decision or the right to an external grievance review.
    Sec. 18. An insurer may not take action against a provider solely on the basis that the provider represents a covered individual in a grievance filed under this chapter.
    Sec. 19. (a) An insurer shall each year file with the commissioner a description of the grievance procedure of the insurer established under this chapter, including:
        (1) the total number of grievances handled through the procedure during the preceding calendar year;
        (2) a compilation of the causes underlying the grievances; and
        (3) a summary of the final disposition of the grievances.
    (b) The information required by subsection (a) must be filed with the commissioner on or before March 1 of each year. The commissioner shall:
        (1) make the information required to be filed under this section available to the public; and
        (2) prepare an annual compilation of the data required under subsection (a) that allows for comparative analysis.
    (c) The commissioner may require any additional reports as are necessary and appropriate for the commissioner to carry out the commissioner's duties under this article.
    Sec. 20. The department may adopt rules under IC 4-22-2 to implement this chapter.

SOURCE: IC 27-8-29; (01)CR038601.19. -->     SECTION 19. IC 27-8-29 IS ADDED TO THE INDIANA CODE

AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]:
    Chapter 29. External Review of Grievances
    Sec. 1. As used in this chapter, "accident and sickness insurance policy" has the meaning set forth in IC 27-8-28-1.
    Sec. 2. As used in this chapter, "appeal" means the procedure described in IC 27-8-28-17.
    Sec. 3. As used in this chapter, "commissioner" refers to the insurance commissioner appointed under IC 27-1-1-2.
    Sec. 4. As used in this chapter, "covered individual" has the meaning set forth in IC 27-8-28-3.
    Sec. 5. As used in this chapter, "department" refers to the department of insurance.
    Sec. 6. As used in this chapter, "external grievance" means the independent review under this chapter of a grievance filed under IC 27-8-28.
    Sec. 7. As used in this chapter, "grievance" has the meaning set forth in IC 27-8-28-6.
    Sec. 8. As used in this chapter, "grievance procedure" has the meaning set forth in IC 27-8-28-7.
    Sec. 9. As used in this chapter, "health care provider" means a person:
        (1) that provides physician services (as defined in IC 12-15-11-1 (a)); or
        (2) who is licensed under IC 25-33.
    Sec. 10. As used in this chapter, "insured" has the meaning set forth in IC 27-8-28-8.
    Sec. 11. As used in this chapter, "insurer" has the meaning set forth in IC 27-8-28-9.
    Sec. 12. An insurer shall establish and maintain an external grievance procedure for the resolution of external grievances regarding:
        (1) an adverse determination of appropriateness;
        (2) an adverse determination of medical necessity; or
        (3) a determination that a proposed service is experimental or investigational;
made by an insurer or an agent of an insurer regarding a service proposed by the treating health care provider.


    Sec. 13. (a) An external grievance procedure established under section 12 of this chapter must:
        (1) allow a covered individual or a covered individual's representative to file a written request with the insurer for an external grievance review of the insurer's appeal resolution under IC 27-8-28-17 not more than forty-five (45) days after the covered individual is notified of the resolution; and
        (2) provide for:
            (A) an expedited external grievance review for a grievance related to an illness, a disease, a condition, an injury, or a disability if the time frame for a standard review would seriously jeopardize the covered individual's:
                (i) life or health; or
                (ii) ability to reach and maintain maximum function; or
            (B) a standard external grievance review for a grievance not described in clause (A).
A covered individual may file not more than one (1) external grievance of an insurer's appeal resolution under this chapter.
    (b) Subject to the requirements of subsection (d), when a request is filed under subsection (a), the insurer shall:
        (1) select a different independent review organization for each external grievance filed under this chapter from the list of independent review organizations that are certified by the department under section 19 of this chapter; and
        (2) rotate the choice of an independent review organization among all certified independent review organizations before repeating a selection.
    (c) The independent review organization chosen under subsection (b) shall assign a medical review professional who is board certified in the applicable specialty for resolution of an external grievance.
    (d) The independent review organization and the medical review professional conducting the external review under this chapter may not have a material professional, familial, financial, or other affiliation with any of the following:
        (1) The insurer.
        (2) Any officer, director, or management employee of the insurer.
        (3) The health care provider or the health care provider's medical group that is proposing the service.
        (4) The facility at which the service would be provided.
        (5) The development or manufacture of the principal drug, device, procedure, or other therapy that is proposed for use by the treating health care provider.
However, the medical review professional may have an affiliation under which the medical review professional provides health care services to covered individuals of the insurer and may have an affiliation that is limited to staff privileges at the health facility, if the affiliation is disclosed to the covered individual and the insurer before commencing the review and neither the covered individual nor the insurer objects.
    (e) A covered individual may be required to pay not more than twenty-five dollars ($25) of the costs associated with the services of an independent review organization under this chapter. All additional costs must be paid by the insurer.
    Sec. 14. (a) A covered individual who files an external grievance under this chapter:
        (1) may not be subject to retaliation for exercising the covered individual's right to an external grievance under this chapter;
        (2) shall be permitted to use the assistance of other individuals, including health care providers, attorneys, friends, and family members throughout the review process;
        (3) shall be permitted to submit additional information relating to the proposed service throughout the review process; and
        (4) shall cooperate with the independent review organization by:
            (A) providing any requested medical information; or
            (B) authorizing the release of necessary medical information.
    (b) An insurer shall cooperate with an independent review organization selected under section 13(b) of this chapter by promptly providing any information requested by the independent review organization.
    Sec. 15. (a) An independent review organization shall:
        (1) for an expedited external grievance filed under section

13(a)(2)(A) of this chapter, within three (3) business days after the external grievance is filed; or
        (2) for a standard appeal filed under section 13(a)(2)(B) of this chapter, within fifteen (15) business days after the appeal is filed;
make a determination to uphold or reverse the insurer's appeal resolution under IC 27-8-28-17 based on information gathered from the covered individual or the covered individual's designee, the insurer, and the treating health care provider, and any additional information that the independent review organization considers necessary and appropriate.
    (b) When making the determination under this section, the independent review organization shall apply:
        (1) standards of decision making that are based on objective clinical evidence; and
        (2) the terms of the covered individual's accident and sickness insurance policy.
    (c) The independent review organization shall notify the insurer and the covered individual of the determination made under this section:
        (1) for an expedited external grievance filed under section 13(a)(2)(A) of this chapter, within twenty-four (24) hours after making the determination; and
        (2) for a standard external grievance filed under section 13(a)(2)(B) of this chapter, within seventy-two (72) hours after making the determination.
    Sec. 16. A determination made under section 15 of this chapter is binding on the insurer.
    Sec. 17. (a) If, at any time during an external review performed under this chapter, the covered individual submits information to the insurer that is relevant to the insurer's resolution of the covered individual's appeal of a grievance decision under IC 27-8-28-17 and that was not considered by the insurer under IC 27-8-28 :
        (1) the insurer may reconsider the resolution under IC 27-8-28-17 ; and
        (2) if the insurer chooses to reconsider, the independent review organization shall cease the external review process

until the reconsideration under subsection (b) is completed.
    (b) An insurer reconsidering the resolution of an appeal of a grievance decision due to the submission of information under subsection (a) shall reconsider the resolution under IC 27-8-28-17 based on the information and notify the covered individual of the insurer's decision:
        (1) within seventy-two (72) hours after the information is submitted, for a reconsideration related to an illness, a disease, a condition, an injury, or a disability that would seriously jeopardize the covered individual's:
            (A) life or health; or
            (B) ability to reach and maintain maximum function; or
        (2) within fifteen (15) days after the information is submitted, for a reconsideration not described in subdivision (1).
    (c) If the decision reached under subsection (b) is adverse to the covered individual, the covered individual may request that the independent review organization resume the external review under this chapter.
    (d) If an insurer to which information is submitted under subsection (a) chooses not to reconsider the insurer's resolution under IC 27-8-28-17 , the insurer shall forward the submitted information to the independent review organization not more than two (2) business days after the insurer's receipt of the information.
    Sec. 18. This chapter does not add to or otherwise change the terms of coverage included in a policy, certificate, or contract under which a covered individual receives health care benefits under IC 27-8.
    Sec. 19. (a) The department shall establish and maintain a process for annual certification of independent review organizations.
    (b) The department shall certify a number of independent review organizations determined by the department to be sufficient to fulfill the purposes of this chapter.
    (c) An independent review organization must meet the following minimum requirements for certification by the department:
        (1) Medical review professionals assigned by the independent review organization to perform external grievance reviews under this chapter:


            (A) must be board certified in the specialty in which a covered individual's proposed service would be provided;
            (B) must be knowledgeable about a proposed service through actual clinical experience;
            (C) must hold an unlimited license to practice in a state of the United States; and
            (D) must not have any history of disciplinary actions or sanctions, including:
                (i) loss of staff privileges; or
                (ii) restriction on participation;
            taken or pending by any hospital, government, or regulatory body.
        (2) The independent review organization must have a quality assurance mechanism to ensure:
            (A) the timeliness and quality of reviews;
            (B) the qualifications and independence of medical review professionals;
            (C) the confidentiality of medical records and other review materials; and
            (D) the satisfaction of covered individuals with the procedures utilized by the independent review organization, including the use of covered individual satisfaction surveys.
        (3) The independent review organization must file with the department the following information on or before March 1 of each year:
            (A) The number and percentage of determinations made in favor of covered individuals.
            (B) The number and percentage of determinations made in favor of insurers.
            (C) The average time to process a determination.
            (D) Any other information required by the department.
        The information required under this subdivision must be specified for each insurer for which the independent review organization performed reviews during the reporting year.
        (4) Any additional requirements established by the department.
    (d) The department may not certify an independent review

organization that is one (1) of the following:
        (1) A professional or trade association of health care providers or a subsidiary or an affiliate of a professional or trade association of health care providers.
        (2) An insurer, a health maintenance organization, or a health plan association, or a subsidiary or an affiliate of an insurer, health maintenance organization, or health plan association.
    (e) The department may suspend or revoke an independent review organization's certification if the department finds that the independent review organization is not in substantial compliance with the certification requirements under this section.
    (f) The department shall make available to insurers a list of all certified independent review organizations.
    (g) The department shall make the information provided to the department under subsection (c)(3) available to the public in a format that does not identify individual covered individuals.
    Sec. 20. Except as provided in section 19(g) of this chapter, documents and other information created or received by the independent review organization or the medical review professional in connection with an external grievance review under this chapter:
        (1) are not public records;
        (2) may not be disclosed under IC 5-14-3 ; and
        (3) must be treated in accordance with confidentiality requirements of state and federal law.
    Sec. 21. (a) An insurer shall each year file with the commissioner a description of the grievance procedure established by the insurer under this chapter, including:
        (1) the total number of external grievances handled through the procedure during the preceding calendar year;
        (2) a compilation of the causes underlying the grievances; and
        (3) a summary of the final disposition of the grievances;
for each independent review organization used by the insurer during the reporting year.
    (b) The information required by subsection (a) must be filed with the commissioner on or before March 1 of each year. The commissioner shall:
        (1) make the information required to be filed under this

section available to the public; and
        (2) prepare an annual compilation of the data required under subsection (a) that allows for comparative analysis.
    (c) The commissioner may require any additional reports that are necessary and appropriate for the commissioner to carry out the commissioner's duties under this article.
    Sec. 22. (a) An independent review organization is immune from civil liability for actions taken in good faith in connection with an external review under this chapter.
    (b) The work product or determination, or both, of an independent review organization under this chapter are admissible in a judicial or administrative proceeding. However, the work product or determination, or both, do not, without other supporting evidence, satisfy a party's burden of proof or persuasion concerning any material issue of fact or law.
    Sec. 23. If a covered individual has the right to an external review of a grievance under Medicare, the covered individual may not request an external review of the same grievance under this chapter.
    Sec. 24. The department may adopt rules under IC 4-22-2 to implement this chapter.

SOURCE: IC 27-13-2-3; (01)CR038601.20. -->     SECTION 20. IC 27-13-2-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. (a) A foreign corporation, other than a foreign corporation defined under IC 27-1-2-3 , may obtain a certificate of authority if the foreign corporation:
        (1) is authorized to do business in Indiana under IC 23-1-49 or IC 23-17-26 ; and
        (2) complies with this article.
    (b) A foreign corporation (as defined in IC 27-1-2-3 ) may obtain a certificate of authority if the foreign corporation complies with this article.
     (c) A foreign or alien health maintenance organization granted a certificate of authority under this section has the same but no greater rights and privileges than a domestic health maintenance organization.
SOURCE: IC 27-13-2-6; (01)CR038601.21. -->     SECTION 21. IC 27-13-2-6 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 6. (a) An applicant

shall submit to the commissioner any modifications or amendments to the items of information required in an application under section 5 of this chapter.
    (b) The commissioner may adopt rules under this section that provide that any modifications or amendments to the items of information in the application required of a health maintenance organization:
        (1) must be submitted to the commissioner before the modification or amendment takes effect:
            (A) for the approval of the commissioner; or
            (B) for the information of the commissioner only; or
        (2) must be indicated by the health maintenance organization to the commissioner at the time of the next succeeding site visit or examination of the organization by the department of insurance.
     (c) A health maintenance organization shall file any assumed corporate name with the department at least thirty (30) days before assuming the name.

SOURCE: IC 27-13-2-9; (01)CR038601.22. -->     SECTION 22. IC 27-13-2-9 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 9. (a) A health maintenance organization established under this article may not:
        (1) use as a part of its corporate name the words "United States", "Federal", "government", "official", or any word that would imply that the company is an administrative agency of the state of Indiana or of the United States, or that it is subject to supervision of any department other than the department of insurance; or
        (2) take or assume a corporate name the same as, or confusingly similar to, an existing name of any other insurance company or other entity licensed or regulated under IC 27, unless at the same time:
            (A) the other company changes its corporate name or withdraws from transacting business in Indiana; and
            (B) the written consent of the other company, signed and verified under oath by its secretary, is filed with the department.
    (b) This section does not affect the right of any health maintenance organization that:
        (1) exists under the laws of Indiana as of July 1, 2001;
        (2) exists under the laws of Indiana as of July 1, 2001, and reorganizes or reincorporates under this article at a later date; or
        (3) is authorized to transact business in Indiana as of July 1, 2001;
to continue the use of its corporate name.

SOURCE: IC 27-13-4-1; (01)CR038601.23. -->     SECTION 23. IC 27-13-4-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1. (a) Subject to section 3 of this chapter, the powers of a health maintenance organization include the following:
        (1) The purchase, lease, construction, renovation, operation, or maintenance of:
            (A) hospitals and medical facilities;
            (B) equipment for hospitals and medical facilities; and
            (C) other property reasonably required for the principal office of the health maintenance organization or for purposes necessary in the transaction of the business of the organization.
        (2) Engaging in transactions between affiliated entities, including loans and the transfer of responsibility under any or all contracts:
            (A) between affiliates; or
            (B) between the health maintenance organization and the parent organization of the health maintenance organization.
        (3) The furnishing of health care services through:
            (A) providers;
            (B) provider associations; and
            (C) agents for providers;
        who are under contract with or are employed by the health maintenance organization. The contracts with providers, provider associations, or agents of providers may include fee for service, cost plus, capitation, or other payment or risk-sharing arrangements.
        (4) Contracting with any person for the performance on behalf of the health maintenance organization of certain functions, including:
            (A) marketing;
            (B) enrollment; and
            (C) administration.
        (5) Contracting with:
            (A) an insurance company licensed in Indiana;
            (B) an authorized reinsurer; or
            (C) a hospital authorized to conduct business in Indiana;
        for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the health maintenance organization.
        (6) The offering of point-of-service products.
        (7) The joint marketing of products with:
            (A) an insurance company that is licensed in Indiana; or
            (B) a hospital that is authorized to conduct business in Indiana;
        if the company that is offering each product is clearly identified.
        (8) Administration of the provision of health care services at the expense of a self-funded plan.
    (b) A health maintenance organization may offer any of the following:
        (1) Plans that include only basic health care services.
        (2) Plans that include basic health care services and other health care services.
        (3) Plans that include health care services other than basic health care services so long as at least one (1) of the plans offered by the health maintenance organization includes basic health care services.
     (c) Notwithstanding subsection (a)(5), a health maintenance organization may not take credit for reinsurance unless the risk is ceded to a reinsurer qualified under IC 27-6-10.
SOURCE: IC 27-13-4-3; (01)CR038601.24. -->     SECTION 24. IC 27-13-4-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. (a) A domestic health maintenance organization must file notice with the commissioner, with supporting information that the commissioner deems adequate, before exercising any power granted in:
        (1) section 1(a)(1); or
        (2) section 1(a)(4);
of this chapter if the proposed transaction is equal to or greater than ten percent (10%) of the health maintenance organization's admitted assets.
    (b) A domestic health maintenance organization must file notice with the commissioner, with the supporting information that the commissioner deems adequate, before exercising any power granted in

section 1(a)(2), if the proposed transaction is equal to or greater than three percent (3%) of the health maintenance organization's admitted assets.
    (c) The commissioner may disapprove an exercise of power referred to in a notice received under subsection (a) or (b) only if, in the opinion of the commissioner, the exercise of the power would:
        (1) substantially and adversely affect the financial soundness of the health maintenance organization; and
        (2) endanger the ability of the health maintenance organization to meet its obligations.
    (d) If the commissioner does not disapprove an exercise of power referred to in a notice received under subsection (a) or (b) within thirty (30) days after the notice is filed with the commissioner, the exercise of power is considered approved.
    (e) The commissioner may adopt rules under IC 4-22-2 exempting from the filing requirement of this section certain activities that have a minimal effect on:
        (1) the financial soundness of the health maintenance organization; and
        (2) the ability of the health maintenance organization to meet its obligations.

SOURCE: IC 27-13-8-1.5; (01)CR038601.25. -->     SECTION 25. IC 27-13-8-1.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1.5. (a) Each health maintenance organization authorized to conduct business in Indiana and required to file an annual statement with the department under this chapter shall prepare the health maintenance organization's statement:
        (1) on the National Association of Insurance Commissioners (NAIC) Annual Statement Blank;
        (2) in accordance with NAIC Annual Statement Instructions; and
        (3) following practices and procedures prescribed by the most recent NAIC Accounting Practices and Procedures Manual.
    (b) To the extent that the NAIC Annual Statement Instructions require disclosure under subsection (a) of compensation paid to or on behalf of a health maintenance organization's officers, directors, or employees, the information may be filed with the department as

an exhibit separate from the annual statement blank. The compensation information described under this subsection shall be maintained by the department as confidential and may not be disclosed to the public under IC 5-14-3.

SOURCE: IC 27-13-8-2; (01)CR038601.26. -->     SECTION 26. IC 27-13-8-2 , AS AMENDED BY P.L.133-1999, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. (a) In addition to the report required by section 1 of this chapter, a health maintenance organization shall each year file with the commissioner the following:
        (1) Audited financial statements of the health maintenance organization for the preceding calendar year prepared in conformity with statutory accounting practices prescribed or otherwise permitted by the department.
        (2) A list of participating providers who provide health care services to enrollees or subscribers of the health maintenance organization.
        (3) A description of the grievance procedure of the health maintenance organization:
            (A) established under IC 27-13-10 , including:
                (i) the total number of grievances handled through the procedure during the preceding calendar year;
                (ii) a compilation of the causes underlying those grievances; and
                (iii) a summary of the final disposition of those grievances; and
            (B) established under IC 27-13-10.1 , including:
                (i) the total number of external grievances handled through the procedure during the preceding calendar year;
                (ii) a compilation of the causes underlying those grievances; and
                (iii) a summary of the final disposition of those grievances;
            for each independent review organization used by the health maintenance organization during the reporting year.
        (4) The percentage of providers credentialed by the health maintenance organization according to the most current standards or guidelines, if any, developed by the National Committee on Quality Assurance or a successor organization.
        (5) The health maintenance organization's Health Plan Employer

Data and Information Set (HEDIS) data.
    (b) The information required by subsection (a)(2) through (a)(4) must be filed with the commissioner on or before March 1 of each year. The audited financial statements required by subsection (a)(1) must be filed with the commissioner on or before June 1 of each year. The health maintenance organization's HEDIS data required by subsection (a)(5) must be filed with the commissioner on or before July 1 of each year. The commissioner shall:
        (1) make the information required to be filed under this section available to the public; and
        (2) prepare an annual compilation of the data required under subsection (a)(3) through (a)(5) that allows for comparative analysis.
    (c) Upon a determination by a health maintenance organization's auditor that the health maintenance organization:
        (1) does not meet the requirements of IC 27-13-12-3 ; or
        (2) is in the condition described in IC 27-13-24-1 (a)(5);
the health maintenance organization shall notify the commissioner within five (5) business days after the auditor's determination.

     (d) The commissioner may require any additional reports as are necessary and appropriate for the commissioner to carry out the commissioner's duties under this article.

SOURCE: IC 27-13-8-3; (01)CR038601.27. -->     SECTION 27. IC 27-13-8-3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. (a) This section applies to a domestic health maintenance organization that is authorized to transact business in Indiana.
    (b) As used in this section, "NAIC" refers to the National Association of Insurance Commissioners.
    (c) On or before March 1 of each year, a health maintenance organization shall file with the National Association of Insurance Commissioners and with the department a copy of the health maintenance organization's annual statement convention blank and additional filings prescribed by the commissioner for the preceding year. A health maintenance organization shall also file quarterly statements with the NAIC and with the department, on or before May 15, August 15, and November 15 of each year, in a form prescribed by the commissioner. The information filed with

the NAIC under this subsection:
        (1) must be:
            (A) in the same format; and
            (B) of the same scope;
        as is required by the commissioner under section 1 of this chapter;
        (2) to the extent required by the NAIC, must include the signed jurat page and the actuarial certification; and
        (3) must be filed electronically in accordance with NAIC electronic filing specifications.
The commissioner may, for good cause shown, grant an exemption from the requirement of this section to domestic health maintenance organizations that operate only in Indiana. If a health maintenance organization files any amendment or addendum to the health maintenance organization's annual statement convention blank or quarterly statement with the commissioner, the health maintenance organization shall also file a copy of the amendment or addendum with the NAIC. Annual and quarterly financial statements are considered filed with the NAIC when delivered to the address designated by the NAIC for the filings, regardless of whether the filing is accompanied by any applicable fee.
    (d) The commissioner may, for good cause shown, grant a health maintenance organization an extension of time for the filing required by subsection (c).
    (e) In the absence of actual malice:
        (1) members of the NAIC;
        (2) duly authorized committees, subcommittees, and task forces of members of the NAIC;
        (3) delegates of members of the NAIC;
        (4) employees of the NAIC; and
        (5) other persons responsible for collecting, reviewing, analyzing, and disseminating information developed from the filing of annual statement convention blanks under this section;
shall be considered to be acting as agents of the commissioner under the authority of this section and are not subject to civil liability for libel, slander, or any other cause of action by virtue of

the collection, review, analysis, or dissemination of the data and information collected from the filings required by this section.
    (f) The commissioner may suspend, revoke, or refuse to renew the certificate of authority of a health maintenance organization that fails to file the health maintenance organization's annual statement convention blank or quarterly statements with the NAIC or with the department within the time allowed by subsection (c) or (d).

SOURCE: IC 27-13-8-4; (01)CR038601.28. -->     SECTION 28. IC 27-13-8-4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 4. (a) The commissioner may impose a civil penalty of five hundred dollars ($500), after notice and hearing under IC 4-21.5-3 , on a health maintenance organization that fails to file an annual statement under this chapter.
    (b) A domestic health maintenance organization that fails to file an audited annual financial statement under section 2(a)(1) of this chapter before June 1 of each year without obtaining an extension is subject to a civil penalty of fifty dollars ($50) per day until the report is received by the commissioner.

SOURCE: IC 27-13-13-9; (01)CR038601.29. -->     SECTION 29. IC 27-13-13-9 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 9. (a) As used in this section, "noncovered health care expenditures" means the costs to a health maintenance organization for health care services:
        (1) that are the obligation of the health maintenance organization;
        (2) for which the enrollee may be liable in the event of the health maintenance organization's insolvency; and
        (3) for which:
            (A) no alternative arrangements have been made that are acceptable to the commissioner; or
            (B) statutory deposits and net worth of the health maintenance organization are determined by the commissioner to be inadequate.
    (b) If noncovered health care expenditures exceed ten percent (10%) of total health care expenditures, a health maintenance organization shall deposit cash or securities that are acceptable to the commissioner with:
        (1) the commissioner; or
        (2) an organization or trustee approved by the commissioner through which a custodial or controlled account is maintained.
    (c) The deposit made under subsection (b) must have a fair market value:
        (1) calculated on the first day of each month; and
        (2) maintained for the remainder of the month;
of not less than one hundred twenty percent (120%) of the health maintenance organization's outstanding liability for noncovered health care expenditures for enrollees in Indiana, including incurred but not reported claims.
    (d) The commissioner may require a health maintenance organization to file periodic reports, including reports on liability for noncovered health care expenditures and audit opinions, that the commissioner considers necessary to monitor compliance with this section.

SOURCE: IC 27-13-15-2; (01)CR038601.30. -->     SECTION 30. IC 27-13-15-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. If:
        (1) the contract between a health maintenance organization and a participating provider has not been reduced to writing as required by this chapter; or
        (2) the contract fails to contain the provision required by section 1(2) 1(a)(4) of this chapter;
the participating provider may not collect or attempt to collect from the subscriber or enrollee any sums that are owed by the health maintenance organization.
SOURCE: IC 27-13-15-3; (01)CR038601.31. -->     SECTION 31. IC 27-13-15-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. (a) A:
        (1) participating provider; or
        (2) trustee, an agent, a representative, or an assignee of a participating provider;
may not bring or maintain any legal action against a subscriber or an enrollee of a health maintenance organization to collect sums owed by the health maintenance organization.
     (b) Except as provided in subsection (c), if a participating provider of a health maintenance organization brings or maintains a legal action against a subscriber or enrollee for an amount owed

to the participating provider by the health maintenance organization, the participating provider is liable to the subscriber or enrollee for costs and attorney's fees incurred by the subscriber or enrollee in defending the legal action.
     (c) A participating provider may not be liable to the subscriber or enrollee for costs and attorney's fees described in subsection (b) if the participating provider can demonstrate a reasonable basis for believing at the time the legal action was brought and while the legal action was maintained that the health maintenance organization did not owe the sums the participating provider sought to collect from the subscriber or enrollee.

SOURCE: IC 27-13-18-1; (01)CR038601.32. -->     SECTION 32. IC 27-13-18-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1. (a) In the event of receivership of a health maintenance organization, the commissioner may order all other carriers that participated in the enrollment process of the group covered by the organization in receivership at the last regular enrollment period of the group to offer the enrollees of the organization in receivership an enrollment period of thirty (30) days beginning on the date of receivership.
    (b) Each carrier referred to in subsection (a) shall offer the enrollees of the health maintenance organization in receivership:
        (1) the same coverage;
        (2) under the same terms; and
        (3) at the same rates;
as the carrier had offered at the last regular enrollment period of the group. The coverage required under this chapter shall begin on the date of receivership and end on the date the contract period would have ended had the health maintenance organization not gone into receivership.
     (c) If there is no carrier referred to in subsection (a), or the commissioner determines that there is no carrier referred to in subsection (a) that has adequate or accessible resources, the commissioner shall equitably allocate the:
        (1) group contracts of the health maintenance organization in receivership; and
        (2) individual contracts of the health maintenance organization in receivership belonging to enrollees who are unable to obtain other coverage;
among all health maintenance organizations operating within a portion of the service area of the health maintenance organization in receivership. The commissioner shall not allocate individual contracts to a health maintenance organization that does not offer direct individual enrollment.
    (d) A health maintenance organization to which the commissioner allocates a group contract under subsection (c)(1) shall offer to the group existing coverage that is most similar to the group's coverage with the health maintenance organization in receivership, at rates consistent with the successor health maintenance organization's existing rating methodology.
    (e) A health maintenance organization to which the commissioner allocates individual contracts under subsection (c)(2) shall offer to the enrollee existing individual or conversion coverage that is most similar to the enrollee's coverage with the health maintenance organization in receivership, at rates consistent with the successor health maintenance organization's existing rating methodology.

SOURCE: IC 27-13-22-1; (01)CR038601.33. -->     SECTION 33. IC 27-13-22-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1. (a) This section does not apply to a health maintenance organization granted a certificate of authority under this article before July 1, 2001.
     (b) A licensed insurer or a hospital authorized to conduct business in Indiana may, either directly or through a subsidiary or an affiliate, organize and operate a health maintenance organization under this article.
SOURCE: IC 27-13-23-8; (01)CR038601.34. -->     SECTION 34. IC 27-13-23-8 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 8. A health maintenance organization shall file a copy of any examination report filed by the insurance commissioner of another state during the preceding calendar year with the annual statement required under IC 27-13-8-1.
SOURCE: IC 27-13-32-1; (01)CR038601.35. -->     SECTION 35. IC 27-13-32-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1. (a) This section does not apply to a health maintenance organization or a limited service health maintenance organization that is a foreign corporation. or is owned by a foreign corporation.
    (b) As used in this section, "foreign corporation" means a corporation organized or reorganized under the law of a state or jurisdiction other than Indiana.
    (c) A person may not acquire control, as that term is defined in IC 27-1-23-1 , of a health maintenance organization or a limited service health maintenance organization unless:
        (1) that person complies with the requirements of IC 27-1-23-2 ; and
        (2) the acquisition is approved by the commissioner under the procedure set forth in IC 27-1-23-2.
SOURCE: IC 27-13-32.5; (01)CR038601.36. -->     SECTION 36. IC 27-13-32.5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]:
    Chapter 32.5. Voluntary Dissolution
    Sec. 1. Upon authorization of voluntary dissolution by the board of directors and any shareholders entitled to vote in respect of the voluntary dissolution, the board of directors shall:
        (1) cause a notice that the health maintenance organization is about to be dissolved to be published at least once in a newspaper of general circulation, printed and published in the English language, in the county in which the principal office of the health maintenance organization is located, and at least once in a newspaper of general circulation, printed and published in the English language in the city of Indianapolis, Marion County, Indiana;
        (2) cause a copy of the publication under subdivision (1) to be mailed to each subscriber;
        (3) file a copy of the publication under subdivision (1) with the department;
        (4) file a certified copy of the articles of dissolution with the department; and
        (5) present to the department the certificate of authority issued or renewed under IC 27-13-3-1 for cancellation.
The department shall file the certified copy of the articles of dissolution, cancel the certificate of authority, endorse the cancellation on the certificate, and return the canceled certificate of authority to the health maintenance organization or its representatives.
    Sec. 2. The dissolution of a health maintenance organization under this chapter does not alter the rights of an enrollee under IC 27-13-7-13.

SOURCE: IC 27-13-34-7; (01)CR038601.37. -->     SECTION 37. IC 27-13-34-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 7. (a) After December 31, 1994, a person, corporation, partnership, limited liability company, or other entity may not operate a limited service health maintenance organization in Indiana without obtaining and maintaining a certificate of authority from the commissioner under this chapter.
    (b) A for-profit or nonprofit corporation organized under the laws of another state, other than a foreign corporation defined under IC 27-1-2-3 , may obtain a certificate of authority to operate a limited service health maintenance organization in Indiana if the foreign corporation is authorized to do business in Indiana under IC 23-1-49 or IC 23-17-26 and complies with this chapter.
    (c) A foreign corporation (as defined in IC 27-1-2-3 ) may obtain a certificate of authority to operate a limited service health maintenance organization in Indiana if the foreign corporation complies with this chapter.
     (d) A foreign or alien limited service health maintenance organization granted a certificate of authority under this chapter has the same but not greater rights and privileges than a domestic limited service health maintenance organization.
SOURCE: IC 34-30-2-114.5; (01)CR038601.38. -->     SECTION 38. IC 34-30-2-114.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 114.5. IC 27-7-12-9 (Concerning communications regarding termination of a homeowner's insurance policy).
SOURCE: IC 34-30-2-116.7; (01)CR038601.39. -->     SECTION 39. IC 34-30-2-116.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 116.7. IC 27-8-29-22 (Concerning independent review organizations).
SOURCE: IC 34-30-2-119.3; (01)CR038601.40. -->     SECTION 40. IC 34-30-2-119.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 119.3. IC 27-13-8-3 (Concerning data and information collected from health maintenance organization filings).
SOURCE: IC 34-30-12-1; (01)CR038601.41. -->     SECTION 41. IC 34-30-12-1 , AS AMENDED BY P.L.1-1999,

SECTION 73, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 1. (a) This section does not apply to services rendered by a health care provider (as defined in IC 34-18-2-14 or IC 27-12-2-14 before its repeal) to a patient in a health care facility (as defined in IC 27-8-10-1 IC 2-5-23-2.5 ).
    (b) Except as provided in subsection (c), a person who comes upon the scene of an emergency or accident or is summoned to the scene of an emergency or accident and, in good faith, gratuitously renders emergency care at the scene of the emergency or accident is immune from civil liability for any personal injury that results from:
        (1) any act or omission by the person in rendering the emergency care; or
        (2) any act or failure to act to provide or arrange for further medical treatment or care for the injured person;
except for acts or omissions amounting to gross negligence or willful or wanton misconduct.
    (c) This subsection applies to a person to whom IC 16-31-6.5 applies. A person who gratuitously renders emergency care involving the use of an automatic external defibrillator is immune from liability for any act or omission not amounting to gross negligence or willful or wanton misconduct if the person fulfills the requirements set forth in IC 16-31-6.5.
    (d) This subsection applies to an individual, business, or organization to which IC 16-31-6.5 applies. An individual, business, or organization that allows a person who is an expected user to use an automatic external defibrillator of the individual, business, or organization to in good faith gratuitously render emergency care is immune from civil liability for any damages resulting from an act or omission not amounting to gross negligence or willful or wanton misconduct by the user or for acquiring or providing the automatic external defibrillator to the user for the purpose of rendering the emergency care if the individual, business, or organization and the user fulfill the requirements set forth in IC 16-31-6.5.

SOURCE: ; (01)CR038601.42. -->     SECTION 42. [EFFECTIVE JULY 1, 2001] (a) As used in this SECTION, "waiver" means a Section 1115 demonstration waiver under the federal Social Security Act (42 U.S.C. 1315).
    (b) The office of Medicaid policy and planning may apply to the United States Department of Health and Human Services for

approval of a waiver to provide coverage to individuals with severe chronic diseases.
    (c) If a provision under this SECTION differs from the requirements of a waiver, the office of Medicaid policy and planning shall submit a waiver request in a manner that complies with the requirements of the waiver. However, after the waiver is approved, the office shall apply not more than one hundred twenty (120) days after the waiver is approved for an amendment to the approved waiver that contains the provisions of this SECTION that were not included in the approved waiver.
    (d) The office of Medicaid policy and planning may not implement a waiver until the office files an affidavit with the governor attesting that a federal waiver applied for under this SECTION is in effect. The office shall file the affidavit under this subsection not more than five (5) days after the office is notified that a waiver is approved.
    (e) If the office or Medicaid policy and planning receives a waiver under this SECTION from the United States Department of Health and Human services and the governor receives the affidavit filed under subsection (d), the office shall implement the waiver not more than sixty (60) days after the governor receives the affidavit.
    (f) The office of Medicaid policy and planning may adopt rules under IC 4-22-2 that are necessary to implement this SECTION.
    (g) This SECTION expires July 1, 2004.

SOURCE: ; (01)CR038601.43. -->     SECTION 43. [EFFECTIVE JULY 1, 2001] (a) As used in this SECTION, "commission" refers to the health finance commission established under IC 2-5-23.
    (b) As used in this SECTION, "association" refers to the Indiana comprehensive health insurance association established under IC 27-8-10-2.1.
    (c) As used in this SECTION, "association policy" has the meaning set forth in IC 27-8-10-1.
    (d) The health finance advisory committee created under IC 2-5-23-6 shall review the following issues and make recommendations to the commission not later than May 1, 2002:
        (1) The current program used by the association to provide coverage for health care services provided to individuals who

are covered under an association policy.
        (2) Potential sources of funding coverage of association policies and administrative expenses.
        (3) Current criteria for determining eligibility and methodology for establishing premiums.
        (4) A plan for administration of the association program by an existing state agency with review by the commission or another legislative body not less than every two (2) years.
        (5) Potential transfer of individuals who are covered under an association policy to private insurance coverage.
    (e) The commission shall make recommendations concerning the issues specified in subsection (d) to the legislative council not later than November 1, 2002.
    (f) This SECTION expires December 1, 2002.

SOURCE: ; (01)CR038601.44. -->     SECTION 44. [EFFECTIVE JULY 1, 2001] (a) Notwithstanding IC 27-8-28-19 and IC 27-8-29-21 , both as added by this act, the information required under IC 27-8-28-19 and IC 27-8-29-21 , both as added by this act, must be filed beginning March 1, 2003.
    (b) This SECTION expires June 30, 2005.

SOURCE: ; (01)CR038601.45. -->     SECTION 45. [EFFECTIVE UPON PASSAGE] (a) The commissioner of the department of insurance shall, not later than July 1, 2001, in consultation with representatives of the health insurance industry, begin to study potential solutions to the following issues:
        (1) Accelerated rate increases for individual health insurance policies that are not actively marketed.
        (2) Consumer misunderstanding of precertification and preauthorization requirements under preferred provider plans.
    (b) The commissioner of the department of insurance shall, not later than July 1, 2002, report to the following individuals any potential solutions that result from the study required under subsection (a):
        (1) The chairman of the insurance, corporations, and small business committee of the Indiana house of representatives.
        (2) The chairman of the insurance and financial institutions committee of the Indiana senate.
    (c) This SECTION expires June 30, 2003.

SOURCE: IC 27-8-10; IC 27-13-16-4; IC 34-30-2-116.
; (01)CR038601.46. -->     SECTION 46. THE FOLLOWING ARE REPEALED [EFFECTIVE JANUARY 1, 2004]: IC 27-8-10 ; IC 27-13-16-4 ; IC 34-30-2-116.
SOURCE: IC 27-2-9; (01)CR038601.47. -->     SECTION 47. IC 27-2-9 IS REPEALED [EFFECTIVE JULY 1, 2001].
SOURCE: ; (01)CR038601.48. -->     SECTION 48. An emergency is declared for this act.".
    Renumber all SECTIONS consecutively.
    (Reference is to SB 386 as printed February 9, 2001.)

and when so amended that said bill do pass.

__________________________________

Representative Crooks


CR038601/DI 97    2001