February 2, 2006
SENATE BILL No. 229
DIGEST OF SB 229
(Updated February 1, 2006 5:49 pm - DI 44)
Citations Affected: IC 27-1.
Synopsis: Independent college self-insurance program. Allows
independent colleges and universities to establish a trust to jointly
self-insure retained risks under certain circumstances. Requires
registration and regulation of such a trust by the department of
Effective: July 1, 2006.
January 9, 2006, read first time and referred to Committee on Insurance and Financial
January 30, 2006, amended, reported favorably _ Do Pass.
February 1, 2006, read second time, amended, ordered engrossed.
February 2, 2006
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
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
this style type
between statutes enacted by the 2005 Regular Session of the General Assembly.
SENATE BILL No. 229
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 27-1-39; (06)SB0229.2.1. -->
SECTION 1. IC 27-1-39 IS ADDED TO THE INDIANA CODE AS
CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 39. Independent Educational Institution Self-Insurance
Sec. 1. As used in this chapter, "commissioner" means the
insurance commissioner appointed under IC 27-1-1-2.
Sec. 2. As used in this chapter, "consortium" refers to a
self-insurance consortium established under section 7 of this
Sec. 3. As used in this chapter, "department" refers to the
department of insurance created by IC 27-1-1-1.
Sec. 4. As used in this chapter, "independent educational
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
(2) pay premiums for stop-loss insurance coverage; and
(3) pay the administrative and other costs of the consortium.
Sec. 7. (a) Notwithstanding any other law, two (2) or more
independent educational institutions may establish a trust under
Indiana law to establish and maintain a self-insurance consortium
through which the independent educational institutions jointly
maintain a self-insurance fund to cover certain retained risks and
jointly purchase stop-loss insurance coverage
. The coverage for
retained risks or stop-loss insurance coverage provided for through
the trust may include any of the following types of coverage:
(1) Property and casualty coverage.
(2) Worker's compensation coverage.
(3) Employee health coverage.
(4) Employee vision coverage.
(5) Employee dental coverage.
(6) Other coverage.
(b) If the coverage described in subsection (a)(3), (a)(4), or (a)(5)
is provided through the self-insurance fund, the coverage must be
provided through a multiple employer welfare arrangement
regulated under IC 27-1-34.
Sec. 8. A consortium shall be governed by a governing authority
comprised entirely of representatives of the consortium's members.
Sec. 9. A trust created under section 7 of this chapter is subject
to regulation by the department as follows:
(1) The trust be registered with the department.
(2) The trust shall:
(A) retain a total risk for the self-insurance fund of not
more than one hundred twenty-five percent (125%) of the
amount of expected claims for the following year; and
(B) obtain stop-loss insurance issued by an insurer
authorized to do business in Indiana to cover losses in
excess of the amount retained under clause (A).
(3) Contributions by the members must be set to fund one
hundred percent (100%) of the total risk retained under
subdivision (2)(A) plus all other costs of the trust.
(4) The trust shall maintain a fidelity bond in an amount
approved by the department, covering each person
responsible for the trust, to protect against acts of fraud or
dishonesty in servicing the trust.
(5) The trust is subject to IC 27-4-1-4.5 regarding claims
(6) The trust shall, before March 1 of each year, file an annual
financial statement in the form required by IC 27-1-3-13.
(7) The trust is not a member of the Indiana insurance
guaranty association under IC 27-6-8. The liability of each
member is joint and several.
(8) The trust is subject to examination by the department. The
trust shall pay all costs associated with an examination.
(9) The department may deny, suspend, or revoke the
registration of the trust if the commissioner finds that the
(A) is in a hazardous financial condition;
(B) refuses to be examined or produce records for
(C) has failed to pay a final judgment rendered against the
trust by a court within thirty (30) days.
Sec. 10. The department may adopt rules under IC 4-22-2 to
implement this chapter.