SB 357-1_ Filed 01/28/2010, 12:05 ChairPerson
Adopted 1/28/2010

COMMITTEE REPORT




MADAM PRESIDENT:

    The Senate Committee on Insurance and Financial Institutions, to which was referred Senate Bill No. 357, has had the same under consideration and begs leave to report the same back to the Senate with the recommendation that said bill be AMENDED as follows:

SOURCE: Page 11, line 4; (10)AM035703.11. -->     Page 11, between lines 4 and 5, begin a new paragraph and insert:
SOURCE: IC 27-1-27-7; (10)AM035703.6. -->     "SECTION 6. IC 27-1-27-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 7. (a) As used in this section, "practitioner" means an individual or corporation who or which holds a certificate of authority under this chapter.
    (b) A practitioner shall conduct the practice of public adjusting in accordance with the standards established by the commissioner of insurance under set forth in section 8 8.5 of this chapter and is subject to the exercise of the disciplinary sanctions under subsection (e), if after a hearing, the commissioner finds:
        (1) the practitioner has employed or knowingly cooperated in fraud or material deception in order to obtain a certificate to practice public adjusting, or has engaged in fraud or material deception in the course of professional services or activities, or has advertised services in a false or misleading manner;
        (2) the practitioner has been convicted of a crime which has direct bearing on the practitioner's ability to continue to practice competently;
        (3) a practitioner has knowingly violated any rule adopted by the commissioner standard under section 8 8.5 of this chapter;
        (4) a practitioner has continued to practice although he the

practitioner has become unfit to practice public adjusting due to:
            (A) professional incompetence;
            (B) failure to keep abreast of current professional theory or practice;
            (C) physical or mental disability; or
            (D) addiction or severe dependency upon alcohol or other drugs which endangers the public by impairing a practitioner's ability to practice safely;
        (5) a practitioner has engaged in a course of lewd or immoral conduct in connection with the delivery of services to clients; or
        (6) a practitioner has allowed his the practitioner's name or a certificate issued to him the practitioner under this chapter to be used in connection with any individual who renders public adjusting services beyond the scope of his the practitioner's training, experience, or competence.
    (c) The commissioner of insurance may order a practitioner to submit to a reasonable physical or mental examination if his the practitioner's physical or mental capacity to practice safely is at issue in a disciplinary proceeding.
    (d) Failure to comply with an order under subsection (c) shall render a practitioner liable to the summary revocation procedures under subsection (f).
    (e) The commissioner of insurance may impose any of the following sanctions, singly or in combination, when he the commissioner finds that a practitioner is guilty of any offense under subsection (b):
        (1) Permanently revoke a practitioner's certificate.
        (2) Suspend a practitioner's certificate.
        (3) Censure a practitioner.
        (4) Issue a letter of reprimand.
        (5) Place a practitioner on probation status and require the practitioner to:
            (A) report regularly to the commissioner upon the matters which are the basis of probation;
            (B) limit practice to those areas prescribed by the commissioner; or
            (C) continue or renew professional education under a practitioner approved by the commissioner until a satisfactory degree of skill has been attained in those areas which are the basis of the probation.
        The commissioner may withdraw a probation order if he the commissioner finds that the deficiency which required disciplinary action has been remedied.


    (f) The commissioner of insurance may summarily suspend a practitioner's certificate for a period of ninety (90) days in advance of a final adjudication or during the appeals process if the commissioner finds that a practitioner represents a clear and immediate danger to the public health and safety if he the practitioner is allowed to continue to practice. The summary suspension may be renewed upon a hearing before the commissioner, and each renewal may be for a period of ninety (90) days or less.
    (g) The commissioner of insurance may reinstate a certificate which has been suspended under this chapter if, after a hearing, the commissioner is satisfied that the applicant is able to practice public adjusting with reasonable skill and safety to clients. As a condition of reinstatement, the commissioner may impose disciplinary or corrective measures authorized under this chapter.
    (h) The commissioner of insurance shall seek to achieve consistency in the application of the sanctions authorized in this section, and significant departures from prior decisions involving similar conduct shall be explained in the commissioner's findings or orders.
    (i) The commissioner of insurance may initiate proceedings under this section on his the commissioner's own motion or on the verified written complaint of any interested person. All such proceedings shall be conducted in accordance with IC 4-21.5.
SOURCE: IC 27-1-27-8.5; (10)AM035703.7. -->     SECTION 7. IC 27-1-27-8.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 8.5. (a) A public adjuster may not do any of the following:
        (1) Solicit, or attempt to solicit, an insured earlier than six (6) days after a loss-producing occurrence, as defined in the insured's insurance contract.
        (2) Permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this chapter.
        (3) Unless full written disclosure has been made to the insured, have a direct or indirect financial interest in any aspect of a claim, other than the fees, commission, or other consideration established in the written contract with the insured.
        (4) Advance money to an insured before the settlement of a claim with the expectation that the public adjuster will be repaid any settlement funds received by the insured.
        (5) Refer or direct the insured to purchase goods, repairs, or services from any person:
            (A) in which the public adjuster has a financial interest; or
            (B) from which the public adjuster may receive direct or indirect compensation.
        (6) Undertake the adjustment of any claim if the public adjuster is not competent and knowledgeable as to the terms and conditions of the insurance coverage.
        (7) Knowingly make any oral or written material misrepresentations of statement which are false or maliciously critical and intended to injure any person engaged in the business of insurance to any insured or potential insured.
        (8) Act as a company adjuster or independent adjuster on a claim for which the public adjuster is providing services as a public adjuster.
        (9) Enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the person to perform the repair work.
    (b) A public adjuster:
        (1) shall communicate fully and promptly with the insured; and
        (2) may not take any action without the insured's knowledge and consent.
".
SOURCE: Page 11, line 12; (10)AM035703.11. -->     Page 11, between lines 12 and 13, begin a new paragraph and insert:
    " Sec. 3. As used in this chapter, "automated claims adjudication system" means a preprogrammed computer system designed for the collection, data entry, calculation, and system generated final resolution of property insurance claims, which:
        (1) is only used by a licensee or a person described in section 6(b)(2) of this chapter;
        (2) complies with all claim payment requirements of the insurance laws of this state; and
        (3) is certified as compliant by an independent adjuster who is licensed under this chapter and an officer of a business entity licensed under this chapter.
".
    Page 11, line 13, delete "3." and insert " 4.".
    Page 11, line 14, delete "governor of the state," and insert " commissioner".
    Page 11, line 15, delete "district, or territory in which the event occurs".
    Page 11, line 25, delete "4." and insert " 5.".
    Page 11, line 40, delete "5." and insert " 6.".
    Page 12, line 13, delete "or".
    Page 12, line 15, delete "adjuster." and insert " adjuster; or
             (C) collect claim information from, or furnish claim information to, insureds or claimants or input data entry into an automated claims adjudicated system if:
                (i) the person is an individual employee of an independent adjuster licensed under this chapter or the independent adjuster's affiliate; and
                (ii) the independent adjuster licensed under this chapter or the independent adjuster's affiliate supervises not more than twenty-five (25) persons described in item (i).
".
    Page 12, line 28, before "a surplus" insert " a managing general agent,".
    Page 12, between lines 40 and 41, begin a new line block indented and insert:
        " (12) A person that investigates, negotiates, or settles crop insurance claims.".
    Page 12, line 41, delete "6." and insert " 7.".
    Page 13, line 1, delete "7." and insert " 8.".
    Page 13, line 4, delete "8." and insert " 9.".
    Page 13, line 8, delete "9." and insert " 10."
    Page 13, line 14, delete "10." and insert " 11.".
    Page 13, line 42, after "commissioner." insert " In the event of multiple catastrophes, an individual who holds a temporary emergency independent adjuster license under this section may adjust claims arising from any other catastrophe that occurs within the ninety (90) day period under this subsection for which the license is effective without the insurer applying for an additional temporary emergency independent adjuster license.".
    Page 14, line 4, delete "11." and insert " 12.".
    Page 14, line 11, delete "in an amount determined by the" and insert " of forty dollars ($40).".
    Page 14, delete line 12.
    Page 14, line 22, delete "17" and insert " 18".
    Page 14, line 27, delete "14" and insert " 15".
    Page 14, line 32, delete "12." and insert " 13.".
    Page 14, line 39, delete "and".
    Page 14, line 40, delete "in an amount determined by the" and insert " of forty dollars ($40); and
        (3) the name, address, Social Security number, and criminal and administrative history of each of the following:
            (A) Owner that has at least ten percent (10%) interest or voting interest in the business entity.
            (B) Partner of the business entity.
            (C) Executive officer of the business entity.
            (D) Director of the business entity.
".
    Page 14, delete line 41.
    Page 15, line 11, delete "17" and insert " 18".
    Page 15, line 16, delete "13." and insert " 14.".
    Page 15, delete line 21.
    Page 15, line 29, delete "in an amount" and insert " of forty dollars ($40),".
    Page 15, line 30, delete "determined by the commissioner,"
    Page 15, line 37, delete "in an amount determined by the" and insert " of eighty dollars ($80).".
    Page 15, delete line 38.
    Page 16, line 23, delete "14." and insert " 15.".
    Page 16, line 23, delete "15" and insert " 16".
    Page 17, line 5, delete "15." and insert " 16.".
    Page 17, line 23, delete "11(b)(5)" and insert " 12(b)(5)".
    Page 17, line 24, delete "14" and insert " 15".
    Page 17, line 39, delete "11(b)(5)" and insert " 12(b)(5)".
    Page 17, line 40, delete "14" and insert " 15".
    Page 17, line 41, delete "16." and insert " 17.".
    Page 17, line 41, delete "17" and insert " 18".
    Page 18, line 5, delete "and".
    Page 18, line 6, delete "in an amount determined" and insert " of ninety dollars ($90); and
            (C) in the case of a business entity, the information required in section 13(a)(3) of this chapter; and
".
    Page 18, delete line 7.
    Page 18, line 12, delete "17" and insert " 18".
    Page 18, line 18, delete "11 or 12" and insert " 12 or 13".
    Page 18, line 18, delete "13 and 14" and insert " 14 and 15".
    Page 18, line 19, delete "in an amount" and insert " of ninety dollars ($90).".
    Page 18, delete line 20.
    Page 18, line 27, delete "15(b)" and insert " 16(b)".
    Page 19, line 2, delete "in an amount determined by" and insert " of ninety dollars ($90); and".
    Page 19, delete line 3.
    Page 19, line 36, delete "17." and insert " 18.".
    Page 21, line 3, delete "12(b)(2)" and insert " 13(b)(2)".
    Page 21, line 21, delete "18." and insert " 19.".
    Page 21, line 23, delete "number of" and insert " of twenty-four

(24)".
    Page 21, line 24, delete "set by the commissioner in rules adopted under" and insert " three (3) hours of which must concern ethics,".
    Page 21, line 25, delete "IC 4-21.5,".
    Page 21, line 34, delete "19." and insert " 20.".
    Page 21, line 39, delete "20." and insert " 21.".
    Page 22, line 21, delete "21." and insert " 22.".
    Page 22, between lines 36 and 37, begin a new paragraph and insert:
    " Sec. 23. If an independent adjuster uses an automated claims adjudicated system, the independent adjuster shall maintain proof of the certification described in section 3(3) of this chapter and provide the proof of certification to the commissioner upon request.".
    Page 22, line 37, delete "22." and insert " 24.".
    Page 24, line 41, after "organization" insert " that is admitted to transact business in Indiana".
    Page 25, line 1, delete "Maintain a physical office in Indiana." and insert " If the health maintenance organization is a domestic health maintenance organization admitted to transact business in Indiana after June 30, 2010, comply with IC 27-1-6-21.".
    Page 25, line 3, delete "location of the" and insert " physical location of its home".
    Page 25, line 3, delete "maintained under subdivision (1)," and insert " ,".
    Page 25, line 9, delete "the following:" and insert " IC 27-1-7-11.".
    Page 25, delete lines 10 through 11.
    Page 25, delete lines 41 through 42, begin a new paragraph and insert:

SOURCE: IC 27-16-2-16; (10)AM035703.14. -->     "SECTION 14. IC 27-16-2-16 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 16. "Working capital" means the difference between a person's:
        (1) current assets; and
        (2) current liabilities;
determined in accordance with generally accepted accounting principles.

SOURCE: IC 27-16-4-2; (10)AM035703.15. -->     SECTION 15. IC 27-16-4-2, AS ADDED BY P.L.245-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 2. (a) This section does not apply to an applicant for limited registration under section 6 of this chapter.
    (b)
An applicant for registration under this article shall file with the department the following information:
        (1) The name or names under which the applicant conducts business.
        (2) The address of the principal place of business of the applicant and the address of each office the applicant maintains in Indiana.
        (3) The applicant's taxpayer or employer identification number.
        (4) A list by jurisdiction of each name under which the applicant has operated in the preceding five (5) years, including any alternative names, names of predecessors, and, if known, successor business entities.
        (5) A statement of ownership that includes the name and evidence of the business experience of any person that, individually or acting in concert with one (1) or more other persons, owns or controls, directly or indirectly, twenty-five percent (25%) or more of the equity interests of the applicant.
        (6) A statement of management that includes the name and evidence of the business experience of any individual who serves as president, chief executive officer, or otherwise has the authority to act as senior executive officer of the applicant.
        (7) Except as provided in subsections (c) and (d), a financial statement:
            (A) setting forth the financial condition of the applicant as of a date not earlier than one hundred eighty (180) days before the date the financial statement is submitted to the department;
            (B) prepared in accordance with generally accepted accounting principles; and
            (C) reviewed audited by an:
                 (i) independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located; or
                (ii) individual who is certified under IC 25-2.1-3 or IC 25-2.1-4;
            with a resulting audit report that is issued without qualification as to the status of the applicant as a going concern.
    (c) If a PEO has less than twelve (12) months of operating history on which to base an audited financial statement, the PEO shall file a financial statement that has been reviewed by an:
        (1) independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located; or
        (2) individual who is certified under IC 25-2.1-3 or IC 25-2.1-4.
    (d) An applicant may apply to the department for an extension of time in which to file the audited financial statement and audit report required by subsection (b). An application under this subsection must be accompanied by a letter from the auditor described in subsection (b) specifying the reason for the requested extension and the anticipated date by which the audit will be completed.

SOURCE: IC 27-16-4-6; (10)AM035703.16. -->     SECTION 16. IC 27-16-4-6, AS ADDED BY P.L.245-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 6. (a) A PEO that is not domiciled in Indiana is eligible for a limited registration under this article if the PEO:
        (1) submits a properly executed request for limited registration on a form prescribed by the department;
        (2) is licensed or registered as a professional employer organization in another state that has licensure or registration requirements that are:
            (A) substantially the same as; or
            (B) more restrictive than;
        the requirements of this article;
        (3) does not:
            (A) maintain an office; or
            (B) directly solicit clients located or domiciled;
        in Indiana; and
        (4) does not have more than fifty (50) covered employees who are employed or domiciled in Indiana on any day.
    (b) A limited registration is valid for one (1) year and may be renewed.
    (c) A PEO that seeks limited registration under this section shall provide to the department information and documentation necessary to show that the PEO qualifies for a limited registration. meets the requirements of this section.
    (d) IC 27-16-6-1(a)(1) IC 27-16-6 does not apply to a PEO that applies for limited registration under this section.
SOURCE: IC 27-16-4-8; (10)AM035703.17. -->     SECTION 17. IC 27-16-4-8, AS ADDED BY P.L.245-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 8. The department shall:
         (1) maintain; and
        (2) publish on the department's Internet site;

a list of PEOs that are registered under this article.
SOURCE: IC 27-16-6-1; (10)AM035703.18. -->     SECTION 18. IC 27-16-6-1, AS ADDED BY P.L.245-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 1. (a) A PEO or PEO group shall maintain either:

do one (1) of the following:
        (1) subject to section 2 of this chapter, a minimum net worth of fifty thousand dollars ($50,000); or
         (1) Maintain positive working capital, as reflected in the financial statement submitted to the department by the PEO or PEO group under IC 27-16-4.
        (2) subject to subsection (b), a bond with a market value of at least fifty thousand dollars ($50,000).
         (2) If the PEO or PEO group does not meet the requirement of subdivision (1), maintain any of the following with a minimum aggregate value in an amount that is at least sufficient to eliminate the PEO's or PEO group's negative working capital plus one hundred thousand dollars ($100,000):
            (A) A surety bond.
            (B) An irrevocable letter of credit.
            (C) Securities.
            (D) Cash.
            (E) A combination of items listed in clauses (A) through (D).

    (b) A bond An instrument or cash described in subsection (a)(2) must be held by a depository an institution designated by the department, securing payment by the PEO or PEO group of all taxes, wages, benefits, or other entitlement due to or with respect to covered employees in the event that the PEO or PEO group does not make the payments when due.

SOURCE: IC 27-16-6-2; (10)AM035703.19. -->     SECTION 19. IC 27-16-6-2, AS ADDED BY P.L.245-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 2. A bond An instrument or cash described in section 1(a)(2) of this chapter must not be included in the calculation of the minimum net worth positive working capital described in section 1(a)(1) of this chapter.

SOURCE: IC 27-1-25-7.5; IC 27-1-27-8.".
; (10)AM035703.20. -->     SECTION 20. THE FOLLOWING ARE REPEALED [EFFECTIVE JULY 1, 2010]: IC 27-1-25-7.5; IC 27-1-27-8.".
    Renumber all SECTIONS consecutively.
    (Reference is to SB 357 as introduced.)

and when so amended that said bill do pass .

Committee Vote: Yeas 9, Nays 0.

____________________________________

Senator Paul, Chairperson


AM 035703/DI 110    2010