HOUSE BILL No. 1452
DIGEST OF INTRODUCED BILL
Citations Affected: IC 27-8.
Synopsis: Insurance producers and policy forms. Specifies policy form
filing requirements for a policy of accident and sickness insurance.
Removes the definition of "compensation" from the law concerning
compensation to insurance producers or representatives for the sale of
long term care policies.
Effective: July 1, 2007.
January 23, 2007, read first time and referred to Committee on Insurance.
First Regular Session 115th General Assembly (2007)
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between statutes enacted by the 2006 Regular Session of the General Assembly.
HOUSE BILL No. 1452
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 27-8-5-1; (07)IN1452.1.1. -->
SECTION 1. IC 27-8-5-1 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]: 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 and reviewed by the commissioner under section 1.5 of
this chapter. 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; 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 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 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 27-8-5-1.5; (07)IN1452.1.2. -->
SECTION 2. IC 27-8-5-1.5 IS ADDED TO THE INDIANA CODE
AS A NEW
SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]: Sec. 1.5. (a) This section applies to a policy of accident and
sickness insurance issued on an individual, group, franchise, or
blanket basis, including a policy issued by an assessment company
or a fraternal benefit society.
(b) As used in this section, "commissioner" refers to the
insurance commissioner appointed under IC 27-1-1-2.
(c) As used in this section, "grossly inadequate filing" means a
policy form filing:
(1) that fails to provide key information, including state
specific information, regarding a product, policy, or rate; or
(2) that demonstrates an insufficient understanding of
applicable legal requirements.
(d) As used in this section, "policy form" means a policy,
contract, certificate, rider, endorsement, evidence of coverage,
advertisement, or any amendment that is required by law to be
filed with the commissioner for approval before use in Indiana.
(e) As used in this section, "type of insurance" refers to a type
of coverage listed on the National Association of Insurance
Commissioners Uniform Life, Accident and Health, Annuity and
Credit Product Coding Matrix, or a successor document, under the
heading "Continuing Care Retirement Communities", "Health",
"Long Term Care", or "Medicare Supplement".
(f) Each person having a role in the filing process described in
subsection (i) shall act in good faith and with due diligence in the
performance of the person's duties.
(g) A policy form may not be issued or delivered in Indiana
unless the policy form has been filed with and approved by the
(h) The commissioner shall do the following:
(1) Create a document containing a list of all product filing
requirements for each type of insurance, with appropriate
citations to the law, administrative rule, or bulletin that
specifies the requirement, including the citation for the type
of insurance to which the requirement applies.
(2) Make the document described in subdivision (1) available
on the department of insurance Internet site.
(3) Update the document described in subdivision (1) at least
annually and not more than thirty (30) days following any
change in a filing requirement.
(i) The filing process is as follows:
(1) A filer shall submit a policy form filing that:
(A) includes a copy of the document described in
(B) indicates the location within the policy form or
supplement that relates to each requirement contained in
the document described in subsection (h); and
(C) certifies that the policy form meets all requirements of
(2) The commissioner shall review a policy form filing and,
not more than sixty (60) days after the commissioner receives
the filing under subdivision (1):
(A) approve the filing; or
(B) provide written notice of a determination:
(i) that deficiencies exist in the filing; or
(ii) that the commissioner disapproves the filing.
A written notice provided by the commissioner under clause
(B) must be based only on the requirements set forth in the
document described in subsection (h), and must cite the
specific requirements not met by the filing. A written notice
provided by the commissioner under clause (B)(i) must state
the reasons for the commissioner's determination in sufficient
detail to enable the filer to bring the policy form into
compliance with the requirements not met by the filing.
(3) A filer may resubmit a policy form that:
(A) was determined deficient under subdivision (2) and has
been amended to correct the deficiencies; or
(B) was disapproved under subdivision (2) and has been
A policy form resubmitted under this subdivision must meet
the requirements set forth as described in subdivision (1), and
must be resubmitted not more than thirty (30) days after the
filer receives the commissioner's written notice of deficiency
or disapproval. If a policy form is not resubmitted within
thirty (30) days after receipt of the written notice, the
commissioner's determination regarding the policy form is
(4) The commissioner shall review a policy form filing
resubmitted under subdivision (3) and, not more than thirty
(30) days after the commissioner receives the resubmission:
(A) approve the resubmitted policy form; or
(B) provide written notice that the commissioner
disapproves the resubmitted policy form.
A written notice of disapproval provided by the commissioner
under clause (B) must be based only on the requirements set
forth in the document described in subsection (h), must cite
the specific requirements not met by the filing, and must state
the reasons for the commissioner's determination in detail.
The commissioner's approval or disapproval of a resubmitted
policy form under this subdivision is final, except that the
commissioner may allow the filer to resubmit a further
revised policy form if the filer, in the filer's resubmission
under subdivision (3), introduced new provisions or
materially modified a substantive provision of the policy
form. If the commissioner allows a filer to resubmit a further
revised policy form under this subdivision, the filer must
resubmit the further revised policy form not more than thirty
(30) days after the filer receives notice under clause (B), and
the commissioner shall issue a final determination on the
further revised policy form not more than thirty (30) days
after the commissioner receives the further revised policy
(5) If the commissioner takes no action on a policy form filed
or resubmitted under this subsection within the applicable
period specified in subdivision (2), (3), or (4), the policy form
is considered approved. If the commissioner disapproves a
policy form filing under this subsection, the commissioner
shall notify the filer of the filer's right to a hearing as
described in subsection (m).
(j) Except as provided in this subsection, the commissioner may
not disapprove a policy form resubmitted under subsection (i)(3)
or (i)(4) for a reason other than a reason specified in the original
notice of determination under subsection (i)(2)(B). The
commissioner may disapprove a resubmitted policy form for a
reason other than a reason specified in the original notice of
determination under subsection (i)(2) if:
(1) the filer has introduced a new provision in the
(2) the filer has materially modified a substantive provision of
the policy form in the resubmission;
(3) there has been a change in requirements applying to the
policy form; or
(4) there has been reviewer error and the written disapproval
fails to state a specific requirement with which the policy form
does not comply.
(k) The commissioner may return a grossly inadequate filing to
the filer without triggering a deadline set forth in this section.
(l) The commissioner may disapprove a policy form if:
(1) the benefits provided under the policy form are not
reasonable in relation to the premium charged; or
(2) the policy form contains provisions that are unjust, unfair,
inequitable, misleading, or deceptive, or that encourage
misrepresentation of the policy.
(m) Upon disapproval of a filing under this section, the
commissioner shall provide written notice to the filer or insurer of
the right to a hearing within twenty (20) days of a request for a
(n) Unless a policy form approved under this chapter contains
a material error or omission, the commissioner may not:
(1) retroactively disapprove the policy form; or
(2) examine the filer of the policy form during a routine or
targeted market conduct examination for compliance with a
policy form filing requirement that was not in existence at the
time the policy form was filed.
SOURCE: IC 27-8-12-18; (07)IN1452.1.3. -->
SECTION 3. IC 27-8-12-18 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 18.
(a) As used in this
section, "compensation" includes pecuniary and nonpecuniary
remuneration of any kind relating to the sale or renewal of the policy
or certificate including, but not limited to, the following:
(5) Finders fees.
An insurer or other entity that provides a commission
to an insurance producer or other representative for
the sale of a long term care insurance policy may not violate the
(1) The amount of the first year commission
or first year
for selling or servicing the policy may not exceed
two hundred percent (200%) of the amount of the commission
paid in the second year.
(2) The amount of commission
or other compensation
in years after the second year must be equal to the amount
provided in the second year.
(3) A commission
or other compensation
must be provided each
year for at least five (5) years after the first year.
If an existing long term care policy or certificate is replaced,
the insurer or other entity that issues the replacement policy may not
provide, and its insurance producer may not accept,
in an amount greater than the renewal
payable by the replacing insurer on renewal policies,
unless the benefits of the replacement policy or certificate are clearly
and substantially greater than the benefits under the replaced policy or
(d) (c) This section does not apply to the following:
(1) Life insurance policies and certificates.
(2) A policy or certificate that is sponsored by an employer for the
(A) the employer's employees; or
(B) the employer's employees and their dependents.