Introduced Version
HOUSE BILL No. 1130
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 27-1; IC 27-5.1-2-16; IC 27-8; IC 27-13.
Synopsis: Regulation of insurance rates. Establishes the insurance rate
commission. Requires certain insurers to receive approval of the
commission before using rates. Makes conforming amendments.
Effective: July 1, 2006.
Kromkowski
January 5, 2006, read first time and referred to Committee on Insurance.
Introduced
Second Regular Session 114th General Assembly (2006)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
this style type, and deletions will appear in
this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
this style type. Also, the
word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
this style type or
this style type reconciles conflicts
between statutes enacted by the 2005 Regular Session of the General Assembly.
HOUSE BILL No. 1130
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 27-1-2-3; (06)IN1130.1.1. -->
SECTION 1. IC 27-1-2-3 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2006]: Sec. 3. As used in this article, and unless
a different meaning appears from the context: (a) "Insurance" means a
contract of insurance or an agreement by which one (1) party, for a
consideration, promises to pay money or its equivalent or to do an act
valuable to the insured upon the destruction, loss or injury of
something in which the other party has a pecuniary interest, or in
consideration of a price paid, adequate to the risk, becomes security to
the other against loss by certain specified risks; to grant indemnity or
security against loss for a consideration.
(b) "Commissioner" means the "insurance commissioner" of this
state.
(c) "Department" means "the department of insurance" of this state.
(d) The term "company" or "corporation" means an insurance
company and includes all persons, partnerships, corporations,
associations, orders or societies engaged in or proposing to engage in
making any kind of insurance authorized by the laws of this state.
(e) The term "domestic company" or "domestic corporation" means
an insurance company organized under the insurance laws of this state.
(f) The term "foreign company" or "foreign corporation" means an
insurance company organized under the laws of any state of the United
States other than this state or under the laws of any territory or insular
possession of the United States or the District of Columbia.
(g) The term "alien company" or "alien corporation" means an
insurance company organized under the laws of any country other than
the United States or territory or insular possession thereof or of the
District of Columbia.
(h) The term "person" includes individuals, corporations,
associations, and partnerships; personal pronoun includes all genders;
the singular includes the plural and the plural includes the singular.
(k) The term "insurance solicitor" means any natural person
employed to aid an insurance producer in any manner in soliciting,
negotiating, or effecting contracts of insurance or indemnity other than
life.
(l) The term "principal office" means that office maintained by the
corporation in this state, the address of which is required by the
provisions of this article to be kept on file in the office of the
department.
(m) The term "articles of incorporation" includes both the original
articles of incorporation and any and all amendments thereto, except
where the original articles of incorporation only are expressly referred
to, and includes articles of merger, consolidation and reinsurance, and
in case of corporations, heretofore organized, articles of reorganization
filed in the office of the secretary of state, and all amendments thereto.
(n) The term "shareholder" means one who is a holder of record of
shares of stock in a corporation, unless the context otherwise requires.
(o) The term "policyholder" means one who is a holder of a contract
of insurance in an insurance company.
(p) The term "member" means one who holds a contract of
insurance or is insured in an insurance company other than a stock
corporation.
(q) The term "capital stock" means the aggregate amount of the par
value of all shares of capital stock.
(r) The term "capital" means the aggregate amount paid in on the
shares of capital stock of a corporation issued and outstanding.
(s) The term "life insurance company" means any company making
one or more of the kinds of insurance set out and defined in class 1(a)
of IC 27-1-5-1.
(t) The term "casualty insurance company" means any company
making the kind or kinds of insurance set out and defined in class 2 of
IC 27-1-5-1.
(u) The term "fire and marine insurance company" means any
company making the kind or kinds of insurance set out and defined in
class 3 of IC 27-1-5-1.
(v) The term "certificate of authority" means an instrument in
writing issued by the department to an insurer, which sets out the
authority of such insurer to engage in the business of insurance or
activities connected therewith.
(w) The term "premium" means money or any other thing of value
paid or given in consideration to an insurer, insurance producer, or
solicitor on account of or in connection with a contract of insurance
and shall include as a part but not in limitation of the above, policy
fees, admission fees, membership fees and regular or special
assessments and payments made on account of annuities.
(x) The term "insurer" means a company, firm, partnership,
association, order, society or system making any kind or kinds of
insurance and shall include associations operating as Lloyds, reciprocal
or inter-insurers, or individual underwriters.
(y) The terms "assessment plan" and "assessment insurance" mean
the mode or plan and the business of a corporation, association or
society organized and limited to the making of insurance on the lives
of persons and against disability from disease, bodily injury or death by
accident, and which provides for the payment of policy claims,
accumulation of reserve or emergency funds, and the expenses of the
management and prosecution of its business by payments to be made
either at stated periods named in the contract or upon assessments, and
wherein the insured's liability to contribute is not limited to a fixed
sum.
(z) "Agency billed" refers to a system in which an insured pays a
premium directly to an insurance agency.
(aa) "Insurance rate commission" refers to the insurance rate
commission established by IC 27-1-39-5.
SOURCE: IC 27-1-22-4; (06)IN1130.1.2. -->
SECTION 2. IC 27-1-22-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 4. (a) Every insurer
shall file with the commissioner every manual of classifications, rules,
and rates, every rating schedule, every rating plan, and every
modification of any of the foregoing which it proposes to use.
(b) The following types of insurance are exempt from the
requirements of subsections (a) and (j):
(1) Inland marine risks, which by general custom of the business
are not written according to manual rates or rating plans.
(2) Insurance, other than workers compensation insurance or
professional liability insurance, issued to exempt commercial
policyholders.
(c) Every such filing shall indicate the character and extent of the
coverage contemplated and shall be accompanied by the information
upon which the filer supports such filing.
(d) The information furnished in support of a filing may include:
(1) the experience and judgment of the insurer or rating
organization making the filing;
(2) its interpretation of any statistical data it relies upon;
(3) the experience of other insurers or rating organizations; or
(4) any other relevant factors.
The commissioner shall have the right to request any additional
relevant information. A filing and any supporting information shall be
open to public inspection as soon as stamped "filed" within a
reasonable time after receipt by the commissioner, and copies may be
obtained by any person on request and upon payment of a reasonable
charge therefor.
(e) Filings shall become effective upon the
date of filing by delivery
or upon date of mailing by registered mail to the commissioner, or on
a later date specified in the filing. approval of the filing by the
insurance rate commission under IC 27-1-39.
(f) Specific inland marine rates on risks specially rated, made by a
rating organization, shall be filed with the commissioner.
(g) Any insurer may satisfy its obligation to make any such filings
by becoming a member of, or a subscriber to, a licensed rating
organization which makes such filings and by authorizing the
commissioner to accept such filings on its behalf, provided that nothing
contained in this chapter shall be construed as requiring any insurer to
become a member of or a subscriber to any rating organization or as
requiring any member or subscriber to authorize the commissioner to
accept such filings on its behalf.
(h) Every insurer which is a member of or a subscriber to a rating
organization shall be deemed to have authorized the commissioner to
accept on its behalf all filings made by the rating organization which
are within the scope of its membership or subscribership, provided:
(1) that any subscriber may withdraw or terminate such
authorization, either generally or for individual filings, by written
notice to the commissioner and to the rating organization and may
then make its own independent filings for any kinds of insurance,
or subdivisions, or classes of risks, or parts or combinations of
any of the foregoing, with respect to which it has withdrawn or
terminated such authorization, or may request the rating
organization, within its discretion, to make any such filing on an
agency basis solely on behalf of the requesting subscriber; and
(2) that any member may proceed in the same manner as a
subscriber unless the rating organization shall have adopted a
rule, with the approval of the commissioner:
(A) requiring a member, before making an independent filing,
first to request the rating organization to make such filing on
its behalf and requiring the rating organization, within thirty
(30) days after receipt of such request, either:
(i) to make such filing as a rating organization filing;
(ii) to make such filing on an agency basis solely on behalf
of the requesting member; or
(iii) to decline the request of such member; and
(B) excluding from membership any insurer which elects to
make any filing wholly independently of the rating
organization.
(i) Under such rules as the commissioner shall adopt, the
commissioner may, with the approval of the insurance rate
commission under IC 27-1-39 and by written order, suspend or
modify the requirement of filing as to any kinds of insurance, or
subdivision, or classes of risk, or parts or combinations of any of the
foregoing, the rates for which can not practicably be filed before they
are used. Such orders and rules shall be made known to insurers and
rating organizations affected thereby. The commissioner insurance
rate commission may make such examination as the commissioner or
the insurance rate commission may deem advisable to ascertain
whether any rates affected by such order are excessive, inadequate, or
unfairly discriminatory.
(j) Upon the written application of the insured, stating the insured's
reasons therefor, filed with the commissioner and approved by the
insurance rate commission, a rate in excess of that provided by a
filing otherwise applicable may be used on any specific risk.
(k) An insurer shall not make or issue a policy or contract except in
accordance with filings which are in effect for that insurer or in
accordance with the provisions of this chapter. Subject to the
provisions of section 6 of this chapter, any rates, rating plans, rules,
classifications, or systems in effect on May 31, 1967, shall be
continued in effect until withdrawn by the insurer or rating
organization which filed them.
(l) The commissioner shall have the right to make an investigation
and to examine the pertinent files and records of any insurer, insurance
producer, or insured in order to ascertain compliance with any filing for
rate or coverage which is in effect. The commissioner shall have the
right to set up procedures necessary to eliminate noncompliance,
whether on an individual policy, or because of a system of applying
charges or discounts which results in failure to comply with such filing.
(m) The department may adopt rules to:
(1) implement the exemption under subsection (b);
(2) impose disclosure requirements the commissioner determines
are necessary to adequately protect exempt commercial
policyholders; and
(3) establish the form of the report required by subsection (n).
(n) Each insurer who issues insurance to an exempt commercial
policyholder shall file an annual report with the department by
February 1 of each year. The annual report may not disclose the
identity of an exempt commercial policyholder and must include only
the following information regarding each exempt commercial
policyholder:
(1) The account number, policy number, or other number used by
the insurer to identify the insured.
(2) The amount of aggregate annual commercial premium.
(3) The inception date and expiration date of commercial
insurance coverage provided by the insurer.
(4) The criteria in section 2.5(a)(3) of this chapter used to
establish the entity as an exempt commercial policyholder.
(o) The annual report filed under subsection (n) must be
accompanied by the fee prescribed by IC 27-1-3-15(e). For purposes of
calculating the required fee, each policy purchased by an exempt
commercial policyholder shall be considered a product filing under
IC 27-1-3-15(e).
SOURCE: IC 27-1-22-5; (06)IN1130.1.3. -->
SECTION 3. IC 27-1-22-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 5. (a) Upon the
commissioner's motion, or upon written request by any insured affected
thereby or by any licensed insurance producer or broker, if such request
is made in good faith and states reasonable grounds, the commissioner,
if the commissioner shall have reason to believe that any filing is not
in compliance with the applicable provisions of section 3 of this
chapter, or in the case of an alleged violation of section 6 of the chapter
if the commissioner finds on the basis of the information on file with
the department that there has been a prima facie showing of a violation
of that section, shall hold a hearing upon not less than ten (10) days
written notice to the rating organization or insurer which made the
filing in issue, specifying the items and matters to be considered and
stating in what manner and to what extent noncompliance is alleged to
exist. No other matter or subject shall be considered at such hearing.
Only the rating organization or insurer which made such filing and the
commissioner may be parties to any hearing or to any judicial appeal
resulting therefrom. Within a reasonable time, the commissioner shall
notify every person making request as to the decision as to the validity
of the request and subsequently shall notify every such person of any
action which may thereafter be taken with reference to such request.
(b) If, after such hearing, the commissioner finds, based upon a
preponderance of the evidence adduced at such hearing and made a
part of the record thereof, that such filing is not in compliance with the
provisions of section 3 of this chapter, the commissioner shall
immediately issue a written order to the parties specifying in detail in
what respects and upon what evidence such noncompliance exists and,
if the filing is in effect, stating when, within a reasonable period
thereafter, such filing shall be deemed no longer effective. Said order
shall not affect any contract policy made or issued prior to the
expiration of the period set forth in said order.
(c) If after such hearing the commissioner finds that such filing does
not violate the provisions of section 3 of this chapter, the commissioner
shall immediately issue a written order to the parties dismissing the
proceedings.
(d) The finding and order of the commissioner shall be made within
ninety (90) days after the close of such hearing or within such
reasonable time extensions as may be fixed by the commissioner.
(e) No manual of classifications, rule, rate, rating schedule, rating
plan, or any modification of any of the foregoing which establishes
standards for measuring variations in hazards or expense provisions, or
both, which has been filed pursuant to section 4 of this chapter shall be
disapproved if the rates produced thereby meet the requirements of
section 3 of this chapter and criteria established by the insurance
rate commission under IC 27-1-39.
(f) All actions of the commissioner under this chapter and all
appeals from the commissioner's action shall be governed by IC 4-21.5,
except where a different specific provision is made in this chapter.
SOURCE: IC 27-1-22-7; (06)IN1130.1.4. -->
SECTION 4. IC 27-1-22-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 7. (a) When a filing or
deviation involving a rate adjustment depends upon a change in the
relationship between the proposed rates and the anticipated production
expense portion thereof from the relationship anticipated under any
rates previously filed and currently in effect for the company or rating
organization involved, such filing or deviation shall be subject to the
provisions of subsection (b).
(b) Each filing or deviation subject to this section shall be on file for
a waiting period of twenty (20) days before it becomes effective. until
the insurance rate commission approves the filing or deviation
under IC 27-1-39. If within such waiting period or after hearing as
provided in this section, the commissioner finds and the insurance
rate commission find that the filing or deviation does not meet the
requirements of this chapter and IC 27-1-39, the commissioner shall
send to the insurer or rating organization which made the filing or to
the insurer which filed the deviation written notice of disapproval
specifying therein in what respects the filing or deviation fails to meet
the requirements of this chapter and stating that the same shall not
become effective. Such filing or deviation shall be deemed to meet the
requirements of this act unless disapproved:
(1) within such waiting period; or
(2) if a hearing has been called and written notice thereof given
by the commissioner during such waiting period, then within ten
(10) days after the date of commencement of such hearing.
Upon the commissioner's own motion, or upon timely written request
by any insurance producer or broker of the company or companies to
which such filing or deviation is applicable, if such request is in good
faith and states reasonable grounds, the commissioner may at any time
within the waiting period call a hearing upon not less than ten (10) nor
more than fifteen (15) days written notice to the company or rating
organization making the filing or to the company filing the deviation.
Within ten (10) days after the commencement of such hearing, the
commissioner shall in writing either approve such filing or deviation
or shall disapprove the same as provided in this section.
SOURCE: IC 27-1-22-9; (06)IN1130.1.5. -->
SECTION 5. IC 27-1-22-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 9. (a) In addition to any
rights conferred pursuant to section 4 of this chapter any member or
subscriber to a rating organization may file with
the commissioner a
deviation from the rates, rating schedules, rating plans, rating systems,
or rules respecting any kind of insurance, division, subdivision,
classification, or any part or combination of any of the foregoing.
(b) Such a filing shall specify the nature and extent of the deviation
and shall be accompanied by the relevant information upon which the
filer supports the deviation. The commissioner shall have the right to
request any additional relevant information.
(c) Such deviation shall become effective upon
the date of filing by
delivery or upon date of mailing by registered mail to the commissioner
or on a later date specified in the filing. approval by the insurance
rate commission. It shall be in effect until terminated by the filer
giving notice to the commissioner of the termination of the deviation.
A change in the rates, rating schedules, rating plans, rating systems, or
rules to which the deviation applies shall not terminate the deviation
without the consent of the insurer to which the deviation applies. Any
such deviation may be terminated by the commissioner pursuant to the
provisions of section 5 of this chapter and after notice and hearings as
provided in section 5 of this chapter.
(d) A deviation filing and supporting information shall be open to
public inspection as soon as stamped "filed" within a reasonable time
after receipt by the commissioner the deviation is approved by the
insurance rate commission, and copies may be had by any person on
request and upon the payment of a reasonable charge therefor.
SOURCE: IC 27-1-22-16; (06)IN1130.1.6. -->
SECTION 6. IC 27-1-22-16 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 16. (a) The
commissioner shall approve reasonable rules and statistical plans,
reasonably adapted to each of the rating systems on file with
him the
commissioner and approved by the insurance rate commission
under IC 27-1-39, which may be modified from time to time and
which shall be used thereafter by each insurer in the recording and
reporting of its loss and countrywide expense experience, in order that
the experience of all insurers may be made available at least annually.
Such rules and plans may also provide for the recording and reporting
of expense experience items which are specially applicable to this state
and are not susceptible of determination by a prorating of countrywide
expense experience. In approving such rules and plans, the
commissioner shall give due consideration to the rating systems on file
with
him the commissioner and approved by the insurance rate
commission and, in order that such rules and plans may be as uniform
as is practicable among the several states, to the rules and to the form
of the plans used for such rating systems in other states. No insurer
shall be required to record or report its loss experience on a
classification basis that is inconsistent with the rating system filed by
it. The commissioner may designate rating organizations or other
agencies, or both, to assist
him the commissioner in gathering such
experience and making compilations thereof, and such compilations
shall be made available, subject to reasonable rules approved by the
commissioner to insurers and advisory and rating organizations.
(b) In order to further uniform administration of the regulatory laws,
the commissioner,
the insurance rate commission, and every insurer,
rating organization, advisory organization or statistical agency may
exchange information and experience data with insurance supervisory
officials, insurers, rating organizations, advisory organizations or
statistical agencies in this and other states and may consult with them
with respect to rate making and the application of rating systems.
(c) The commissioner may make reasonable rules and regulations
necessary to effect the purposes of this section.
SOURCE: IC 27-1-39; (06)IN1130.1.7. -->
SECTION 7. IC 27-1-39 IS ADDED TO THE INDIANA CODE AS
A
NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2006]:
Chapter 39. Insurance Rate Commission
Sec. 1. As used in this chapter, "commission" refers to the
insurance rate commission established by section 5 of this chapter.
Sec. 2. As used in this chapter, "insurer" refers to an insurer
that issues, enters into, or delivers a policy or contract that
provides one (1) or more of the kinds of insurance described in
section 4 of this chapter.
Sec. 3. As used in this chapter, "rate" means a:
(1) rate;
(2) rating schedule;
(3) rating methodology;
(4) rating plan; or
(5) modification of an item described in subdivisions (1)
through (4);
used by an insurer in connection with a policy or contract that
provides one (1) or more of the kinds of insurance described in
section 4 of this chapter.
Sec. 4. (a) This chapter applies to the kinds of insurance to
which the following apply:
(1) IC 27-1-22.
(2) IC 27-5.1-2.
(3) IC 27-8-4.
(4) IC 27-8-5.
(5) IC 27-13.
(b) This chapter does not apply to a rate filing reviewed under
IC 27-8-31.
Sec. 5. (a) The insurance rate commission is established. The
commission consists of the following members:
(1) The commissioner appointed under IC 27-1-1-2, who shall
serve as chairperson of the commission.
(2) The following members appointed by the governor:
(A) Two (2) representatives of accident and sickness
insurers.
(B) Two (2) representatives of property and casualty
insurers.
(C) A representative of the Hoosier Alliance for Consumer
Rights.
(D) A representative of another consumer advocacy group.
(E) A representative of the Indiana Trial Lawyers
Association.
(F) A representative of business.
(b) A member of the commission serves at the pleasure of the
governor.
(c) A member of the general assembly shall not serve as a
member of the commission.
Sec. 6. Notwithstanding any other law, an insurer shall not use
any rate until the insurer has:
(1) filed the rate with the commissioner for review by the
commission; and
(2) received notice from the commissioner that the
commission has approved the rate.
Sec. 7. (a) The commission shall:
(1) review a rate filed by an insurer;
(2) provide notice and a hearing under IC 4-21.5 for the
insurer to provide information related to the filing; and
(3) approve or disapprove the rate filing based on:
(A) criteria that applies to the rate filing under this title;
and
(B) additional criteria established by the commission.
(b) The commissioner shall provide notice of approval,
disapproval, or the need for additional information from an
insurer not more than ten (10) days after the commission takes
action under subsection (a)(3).
(c) For purposes of subsection (a)(3), to the extent that criteria
established by the commission conflict with criteria specified in this
title, the criteria established by the commission are controlling.
Sec. 8. The department of insurance shall staff the commission.
Sec. 9. The expenses of the commission shall be paid from the
department of insurance fund established by IC 27-1-3-28.
Sec. 10. Each member of the commission who is not a state
employee is entitled to the minimum salary per diem provided by
IC 4-10-11-2.1(b). The member is also entitled to reimbursement
for traveling expenses as provided under IC 4-13-1-4 and other
expenses actually incurred in connection with the member's duties
as provided in the state policies and procedures established by the
Indiana department of administration and approved by the budget
agency.
Sec. 11. Each member of the commission who is a state
employee is entitled to reimbursement for traveling expenses as
provided under IC 4-13-1-4 and other expenses actually incurred
in connection with the member's duties as provided in the state
policies and procedures established by the Indiana department of
administration and approved by the budget agency.
Sec. 12. The affirmative votes of a majority of the members
appointed to the commission are required for the commission to
take action on any measure.
Sec. 13. The commission may adopt rules under IC 4-22-2 to
implement this chapter.
SOURCE: IC 27-5.1-2-16; (06)IN1130.1.8. -->
SECTION 8. IC 27-5.1-2-16 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 16. (a) A farm mutual
insurance company may not deliver or issue for delivery an insurance
policy or an endorsement or a rider to an insurance policy until a copy
of the form and the rates charged for the insurance policy are filed with
the commissioner and the rates are approved by the insurance rate
commission under IC 27-1-39.
(b) A farm mutual insurance company may use any form or rate
filed with the commissioner or rate approved by the insurance rate
commission unless the commissioner notifies the farm mutual
insurance company in writing that the form is disapproved not more
than thirty (30) days after the commissioner's receipt of the rate or form
filing. The insurance rate commission may disapprove a rate, and
the commissioner may disapprove a rate or form, for the following
reasons:
(1) An inconsistency with this article or another applicable state
law.
(2) A provision that is:
(A) deceptive;
(B) ambiguous; or
(C) misleading.
(c) If the insurance rate commission disapproves a rate, or the
commissioner disapproves a rate or form under this section, the
commissioner shall notify the farm mutual insurance company of the
reason that the rate or form was disapproved. The farm mutual
insurance company may request a hearing before the commissioner
under IC 4-21.5 concerning the disapproval.
(d) A farm mutual insurance company may seek judicial review
under IC 4-21.5-5 of the commissioner's final disapproval of a rate or
form under this section.
(e) The commissioner may charge a farm mutual insurance company
a reasonable fee as provided in IC 27-1-3-15 for the filing of a rate or
form.
SOURCE: IC 27-8-4-7; (06)IN1130.1.9. -->
SECTION 9. IC 27-8-4-7 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2006]: Sec. 7. (a) All policies, certificates of
insurance, notices of proposed insurance, applications for insurance,
endorsements, and riders delivered or issued for delivery in this state
and the schedules of premium rates pertaining thereto shall be filed
with the commissioner.
(b) The commissioner shall, within thirty (30) days after the filing
of any such policies, certificates of insurance, notices of proposed
insurance, applications for insurance, endorsements, and riders,
disapprove any such form if the benefits provided therein are not
reasonable in relation to the premium charge according to the rates
approved by the insurance rate commission under IC 27-1-39, or
if it contains provisions which are unjust, unfair, inequitable,
misleading, deceptive, or encourage misrepresentation of the coverage,
or are contrary to any provision of this title or of a rule promulgated
under this title.
(c) If the commissioner notifies the insurer that the form is
disapproved, it shall be unlawful thereafter for such insurer to issue or
use such form. In such notice, the commissioner shall specify the
reason for his the commissioner's disapproval and state that a hearing
will be granted within twenty (20) days after request in writing by the
insurer. No such policy, certificate of insurance, notice of proposed
insurance, nor any application, endorsement, or rider, shall be issued
or used until the expiration of thirty (30) days after it has been so filed,
unless the commissioner shall give his the commissioner's prior
written approval thereto.
(d) The commissioner may, at any time after a hearing held not less
than twenty (20) days after written notice to the insurer, withdraw his
the commissioner's approval of any such form on any ground set forth
in subsection (b). The written notice of such hearing shall state the
reason for the proposed withdrawal.
(e) It shall be unlawful for the insurer to issue such forms or use
them after the effective date of such withdrawal.
(f) If a group policy of credit life insurance or credit accident and
health insurance:
(1) has been delivered by an insurer in this state before July 6,
1961; or
(2) has been or is delivered by an insurer in another state before
or after July 6, 1961;
such insurer shall be required to file only the group certificate and
notice of proposed insurance delivered or issued for delivery in this
state as specified in sections 6(b) and 6(d) of this chapter, and such
forms shall be approved by the commissioner if they conform with the
requirements specified in sections 6(b) and 6(d) and if the schedules of
premium rates applicable to the insurance evidenced by such certificate
or notice are not in excess of the insurer's schedules of premium rates
on file with the commissioner provided, and approved by the
insurance rate commission under IC 27-1-39. However, that the
premium rate in effect on group policies existing on July 6, 1961, may
be continued until the first policy anniversary date following the date
this section becomes operative as provided in section 12 of this
chapter.
(g) Any order or final determination of the commissioner under the
provisions of this section shall be subject to judicial review.
SOURCE: IC 27-8-4-8; (06)IN1130.1.10. -->
SECTION 10. IC 27-8-4-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 8. (a) Any insurer may
revise its schedules of premium rates from time to time, and shall file
such revised schedules with the commissioner for approval by the
insurance rate commission under IC 27-1-39. No insurer shall issue
any credit life insurance policy or credit accident and health insurance
policy for which the premium rate exceeds that determined by the
schedules of such insurer as then on file with the commissioner and
approved by the insurance rate commission.
(b) Each individual policy, or group certificate shall provide that in
the event of termination of the insurance prior to the scheduled
maturity date of the indebtedness, any refund of an amount paid by the
debtor for insurance shall be paid or credited promptly to the person
entitled thereto. Provided, However, That the commissioner shall
prescribe a minimum refund and no refund which would be less than
such minimum need be made. The formula to be used in computing
such refund shall be filed with and approved by the commissioner.
(c) If a creditor requires a debtor to make any payment for credit life
insurance or credit accident and health insurance and an individual
policy or group certificate of insurance is not issued, the creditor shall
immediately give written notice to such debtor and shall promptly
make an appropriate credit to the account.
(d) The amount charged to a debtor for any credit life or credit
health and accident insurance shall not exceed the premiums charged
by the insurer, as computed at the time the charge to the debtor is
determined.
SOURCE: IC 27-8-5-1; (06)IN1130.1.11. -->
SECTION 11. IC 27-8-5-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 1. (a) The term "policy
of accident and sickness insurance", as used in this chapter, includes
any policy or contract covering one (1) or more of the kinds of
insurance described in Class 1(b) or 2(a) of IC 27-1-5-1. Such policies
may be on the individual basis under this section and sections 2
through 9 of this chapter, on the group basis under this section and
sections 16 through 19 of this chapter, on the franchise basis under this
section and section 11 of this chapter, or on a blanket basis under
section 15 of this chapter and (except as otherwise expressly provided
in this chapter) shall be exclusively governed by this chapter.
(b) No policy of accident and sickness insurance may be issued or
delivered to any person in this state, nor may any application, rider, or
endorsement be used in connection with an accident and sickness
insurance policy until a copy of the form of the policy and of the
classification of risks and the premium rates, or, in the case of
assessment companies, the estimated cost pertaining thereto, have been
filed with the commissioner and the premium rates have been
approved by the insurance rate commission under IC 27-1-39. This
section is applicable also to assessment companies and fraternal benefit
associations or societies.
(c) No policy of accident and sickness insurance may be issued, nor
may any application, rider, or endorsement be used in connection with
a policy of accident and sickness insurance, until the expiration of
thirty (30) days after it has been filed under subsection (b), unless the
commissioner gives his written approval to it before the expiration of
the thirty (30) day period.
(d) The commissioner may, within thirty (30) days after the filing of
any form under subsection (b), disapprove the form:
(1) if, in the case of an individual accident and sickness form, the
benefits provided therein are unreasonable in relation to the
premium charged according to the rates approved by the
insurance rate commission under IC 27-1-39; or
(2) if, in the case of an individual, blanket, or group accident and
sickness form, it contains a provision or provisions that are unjust,
unfair, inequitable, misleading, or deceptive or that encourage
misrepresentation of the policy.
(e) If the commissioner notifies the insurer that filed a form that the
form does not comply with this section, it is unlawful thereafter for the
insurer to issue the form or use it in connection with any policy. In the
notice given under this subsection, the commissioner shall specify the
reasons for his the commissioner's disapproval and state that a hearing
will be granted within twenty (20) days after request in writing by the
insurer.
(f) The commissioner may at any time, after a hearing of which not
less than twenty (20) days written notice has been given to the insurer,
withdraw his the commissioner's approval of any form filed under
subsection (b) on any of the grounds stated in this section. It is
unlawful for the insurer to issue the form or use it in connection with
any policy after the effective date of the withdrawal of approval. The
notice of any hearing called under this subsection must specify the
matters to be considered at the hearing, and any decision affirming
disapproval or directing withdrawal of approval under this section must
be in writing and must specify the reasons for the decision.
(g) Any order or decision of the commissioner under this section is
subject to review under IC 4-21.5.
SOURCE: IC 27-8-15-26; (06)IN1130.1.12. -->
SECTION 12. IC 27-8-15-26 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 26. The commissioner
may suspend all or any part of section 16 of this chapter as to the
premium rates applicable to one (1) small employer for at least one (1)
rating period upon a filing by the small employer insurer and a finding
by the commissioner and the insurance rate commission that either:
(1) the suspension is reasonable in light of the financial condition
of the insurer; or
(2) the suspension would enhance the efficiency and fairness of
the marketplace for small employer health insurance.
SOURCE: IC 27-13-3-1; (06)IN1130.1.13. -->
SECTION 13. IC 27-13-3-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 1. After receiving a
completed application, the commissioner shall issue a certificate of
authority to operate a health maintenance organization to the applicant
if:
(1) the application fee is received by the commissioner; and
(2) the commissioner is satisfied that the following requirements
are met:
(A) The persons responsible for the conduct of the affairs of
the applicant are competent, trustworthy, and have good
reputations.
(B) The health maintenance organization will effectively
provide or arrange for the provision of the health care services
covered in the health maintenance organization's individual
and group contracts on a prepaid basis, through insurance or
other means, except to the extent of reasonable requirements
for copayments and deductibles.
(C) The health maintenance organization complies with
IC 27-13-12 through IC 27-13-19.
(D) The insurance rate commission has approved the
methodology submitted under IC 27-13-2-5(9)(B).
SOURCE: IC 27-13-20-1; (06)IN1130.1.14. -->
SECTION 14. IC 27-13-20-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 1. The rates to be used
by a health maintenance organization, including the actuarial
assumptions underlying those rates, must be filed with the
commissioner for approval by the insurance rate commission under
IC 27-1-39 and:
(1) must be established in accordance with actuarial principles for
various categories of enrollees and, in the case of a group
contract, shall not be individually determined based on the status
of an enrollee's health;
(2) must be developed by an actuary or other qualified person
acceptable to the commissioner; and
(3) may not be excessive, inadequate, or unfairly discriminatory.
SOURCE: IC 27-13-20-2; (06)IN1130.1.15. -->
SECTION 15. IC 27-13-20-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 2. (a) Except as
provided in subsection (b), a document submitted to the commissioner
under this chapter is deemed approved when
one (1) of the following
conditions is met:
(1) the health maintenance organization receives a written
communication of approval from the commissioner.
(2) Thirty (30) days pass after the commissioner receives the
document.
(b) A document is not
deemed approved under subsection
(a)(2) (a)
if, within thirty (30) days after the commissioner receives the
document, or within any period of extension granted by the
commissioner, the commissioner deposits in the United States mail
addressed to the health maintenance organization a written
communication to the contrary. Not more than thirty (30) days after
receiving the written communication from the commissioner, the health
maintenance organization may request a hearing. If, not more than
thirty (30) days after receiving the communication from the
commissioner, the health maintenance organization requests a hearing,
the commissioner shall hold a hearing upon not less than ten (10) days
notice to the health maintenance organization.