Citations Affected: IC 27-4-1-4; IC 27-8-11-7; IC 27-13-15-4.
Synopsis: Health provider reimbursement contracts. Prohibits certain
provisions in health provider reimbursement agreements.
Effective: July 1, 2004.
January 6, 2004, read first time and referred to Committee on Health and Provider
A BILL FOR AN ACT to amend the Indiana Code concerning
SECTION 1. IC 27-4-1-4, AS AMENDED BY P.L.178-2003,
SECTION 35, AS AMENDED BY P.L.201-2003, SECTION 2, AND
AS AMENDED BY P.L.211-2003, SECTION 1, IS CORRECTED
AND AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2004]: Sec. 4. The following are hereby defined as unfair methods of
competition and unfair and deceptive acts and practices in the business
(1) Making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, or statement:
(A) misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon;
(B) making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies;
(C) making any misleading representation or any misrepresentation as to the financial condition of any insurer,
or as to the legal reserve system upon which any life insurer
(D) using any name or title of any policy or class of policies misrepresenting the true nature thereof; or
(E) making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce such policyholder to lapse, forfeit, or surrender
(2) Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to any person in the conduct of
his the person's insurance business, which is untrue,
deceptive, or misleading.
(3) Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false, or maliciously critical of or derogatory to the financial condition of an insurer, and which is calculated to injure any person engaged in the business of insurance.
(4) Entering into any agreement to commit, or individually or by a concerted action committing any act of boycott, coercion, or intimidation resulting or tending to result in unreasonable restraint of, or a monopoly in, the business of insurance.
(5) Filing with any supervisory or other public official, or making, publishing, disseminating, circulating, or delivering to any person, or placing before the public, or causing directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer with intent to deceive. Making any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to which such insurer is required by law to report, or which has authority by law to examine into its condition or into any of its affairs, or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such
insurer in any book, report, or statement of such insurer.
(6) Issuing or delivering or permitting agents, officers, or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance.
(7) Making or permitting any of the following:
(A) Unfair discrimination between individuals of the same class and equal expectation of life in the rates or assessments charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract; however, in determining the class, consideration may be given to the nature of the risk, plan of insurance, the actual or expected expense of conducting the business, or any other relevant factor.
(B) Unfair discrimination between individuals of the same class involving essentially the same hazards in the amount of premium, policy fees, assessments, or rates charged or made for any policy or contract of accident or health insurance or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatever; however, in determining the class, consideration may be given to the nature of the risk, the plan of insurance, the actual or expected expense of conducting the business, or any other relevant factor.
(C) Excessive or inadequate charges for premiums, policy fees, assessments, or rates, or making or permitting any unfair discrimination between persons of the same class involving essentially the same hazards, in the amount of premiums, policy fees, assessments, or rates charged or made for:
(i) policies or contracts of reinsurance or joint reinsurance, or abstract and title insurance;
(ii) policies or contracts of insurance against loss or damage to aircraft, or against liability arising out of the ownership, maintenance, or use of any aircraft, or of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance; or
(iii) policies or contracts of any other kind or kinds of insurance whatsoever.
thereunder, which may be made retroactive only for such
(D) Paying by an insurer or
agent insurance producer thereof
duly licensed as such under the laws of this state Indiana of
money, commission, or brokerage, or giving or allowing by an
insurer or such licensed agent insurance producer thereof
anything of value, for or on account of the solicitation or
negotiation of policies or other contracts of any kind or kinds,
to a broker, agent, an insurance producer, or a solicitor duly
licensed under the laws of this state, but such broker, agent,
insurance producer, or solicitor receiving such consideration
shall not pay, give, or allow credit for such consideration as
received in whole or in part, directly or indirectly, to the
insured by way of rebate.
(9) Requiring, as a condition precedent to loaning money upon the security of a mortgage upon real property, that the owner of the property to whom the money is to be loaned negotiate any policy of insurance covering such real property through a particular insurance
agent producer or broker or brokers. However, this
subdivision shall not prevent the exercise by any lender of its or
his the lender's right to approve or disapprove of the insurance
company selected by the borrower to underwrite the insurance.
(10) Entering into any contract, combination in the form of a trust or otherwise, or conspiracy in restraint of commerce in the business of insurance.
(11) Monopolizing or attempting to monopolize or combining or conspiring with any other person or persons to monopolize any part of commerce in the business of insurance. However, participation as a member, director, or officer in the activities of any nonprofit organization of
agents insurance producers or other
workers in the insurance business shall not be interpreted, in
itself, to constitute a combination in restraint of trade or as
combining to create a monopoly as provided in this subdivision
and subdivision (10). The enumeration in this chapter of specific
unfair methods of competition and unfair or deceptive acts and
practices in the business of insurance is not exclusive or
restrictive or intended to limit the powers of the commissioner or
department or of any court of review under section 8 of this
(12) Requiring as a condition precedent to the sale of real or personal property under any contract of sale, conditional sales contract, or other similar instrument or upon the security of a
chattel mortgage, that the buyer of such property negotiate any
policy of insurance covering such property through a particular
agent, insurance producer, or broker or
brokers. However, this subdivision shall not prevent the exercise
by any seller of such property or the one making a loan thereon of
his, her, or its the right to approve or disapprove of the insurance
company selected by the buyer to underwrite the insurance.
(13) Issuing, offering, or participating in a plan to issue or offer, any policy or certificate of insurance of any kind or character as an inducement to the purchase of any property, real, personal, or mixed, or services of any kind, where a charge to the insured is not made for and on account of such policy or certificate of insurance. However, this subdivision shall not apply to any of the following:
(A) Insurance issued to credit unions or members of credit unions in connection with the purchase of shares in such credit unions.
(B) Insurance employed as a means of guaranteeing the performance of goods and designed to benefit the purchasers or users of such goods.
(C) Title insurance.
(D) Insurance written in connection with an indebtedness and intended as a means of repaying such indebtedness in the event of the death or disability of the insured.
(E) Insurance provided by or through motorists service clubs or associations.
(F) Insurance that is provided to the purchaser or holder of an air transportation ticket and that:
(i) insures against death or nonfatal injury that occurs during the flight to which the ticket relates;
(ii) insures against personal injury or property damage that occurs during travel to or from the airport in a common carrier immediately before or after the flight;
(iii) insures against baggage loss during the flight to which the ticket relates; or
(iv) insures against a flight cancellation to which the ticket relates.
(14) Refusing, because of the for-profit status of a hospital or medical facility, to make payments otherwise required to be made under a contract or policy of insurance for charges incurred by an insured in such a for-profit hospital or other for-profit medical facility licensed by the state department of health.