Citations Affected: IC 27-1-39.
Synopsis: Independent college self-insurance program. Allows
independent colleges and universities to enter into agreements to
jointly self-insure certain retained risks under certain circumstances.
Requires reports to the department of insurance.
Effective: July 1, 2006.
January 9, 2006, read first time and referred to Committee on Insurance and Financial
A BILL FOR AN ACT to amend the Indiana Code concerning
institution" refers to an independent, degree granting college or
university that is:
(1) accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools;
(2) chartered in Indiana; and
(3) operated as a nonprofit entity under Section 501(c)(3) of the Internal Revenue Code.
Sec. 5. As used in this chapter, "member" means an independent educational institution that enters into an agreement under section 7 of this chapter to form a consortium.
Sec. 6. As used in this chapter, "self-insurance fund" means a fund established by a consortium to provide money sufficient to:
(1) cover self-insured risk retained by members for losses covered by the consortium program;
(2) pay premiums for excess insurance coverage; and
(3) pay the administrative and other costs of the consortium program.
Sec. 7. Notwithstanding any other law, five (5) or more independent educational institutions may enter into an agreement to establish and maintain a self-insurance consortium through which the independent educational institutions maintain a program of joint self-insurance to cover certain retained risks and jointly purchase excess insurance coverage, including any of the following types of excess insurance coverage:
(1) Casualty insurance, including:
(A) educator legal liability;
(B) other liability; and
(C) student accident;
(2) Property insurance, including inland marine insurance.
(3) Motor vehicle insurance.
(4) Surety and fidelity insurance.
(5) Umbrella and excess insurance.
(6) Worker's compensation insurance.
Sec. 8. A consortium shall be governed by a governing body comprised entirely of representatives of the consortium's members.
Sec. 9. The governing body of a consortium shall do the following:
(1) Determine the types of risks covered under the consortium program.
(2) Establish and maintain a self-insurance fund that is subject to limits:
(A) on the total amount of self-insured risk that may be retained by the members; and
(i) the specific claims; and
(ii) the aggregate of all claims;
submitted by members that are payable from the self-insurance fund in a fiscal year.
(3) Annually assure, through member assessments and reserves, a self-insurance fund balance sufficient to fund at least:
(A) one hundred percent (100%) of the self-insured risk retained by the members; and
(B) the other costs of the consortium program, including premiums for excess insurance coverage and administrative costs;
as determined by a qualified, independent actuary. The sum of annual assessments plus reserves plus aggregate excess insurance coverage must be equal to at least one million dollars ($1,000,000).
(4) Set member assessments according to each member's share of self-insured risk and other costs of the consortium program as determined by a qualified, independent actuary.
(5) Maintain excess insurance coverage for claims that exceed the amount of self-insured risk retained by the members and that exceed the per claim amount or aggregate amount covered by the self-insurance fund in a fiscal year.
(6) Maintain a program of reserve evaluation to protect the financial stability of the self-insurance fund in an amount and a manner determined by a qualified, independent actuary.
(7) Submit to the:
(A) members; and
not more than six (6) months after the close of the consortium program's fiscal year, a fiscal year end financial statement certified by an independent certified public accountant.
Sec. 10. If the amount available in a self-insurance fund is insufficient to pay the liabilities of the consortium program, the members may be assessed, according to each member's share as determined under section 9(4) of this chapter, an amount sufficient to fund the liabilities that exceed the amount in the self-insurance fund.