Citations Affected: IC 27-1; IC 27-4; IC 27-9; IC 28-1; IC 28-5; IC 28-6.1.
Synopsis: Insurance activities of depository institutions. Conference committee report for EHB
1191. Amends the interest rate upon which the minimum forfeiture amount for annuity contracts
issued from July 1, 2002, through June 30, 2004, is based. Imposes certain requirements on
depository institutions that sell, solicit, advertise, or offer insurance. Makes a violation of the
requirements an unfair and deceptive act and practice in the business of insurance. (THIS
CONFERENCE COMMITTEE REPORT: (1) amends the interest rate upon which the
minimum forfeiture amount for annuity contracts issued from July 1, 2002, through June 30,
2004, is based; (2) provides for treatment of a segregated investment account in the event of
liquidation of an insurer; and (3) allows a depository institution or an affiliate to require of an
insurance producer or an insurer a procedure that is not customarily required of an insurance
producer or insurer that is connected with the depository institution or affiliate.)
Effective: Upon passage; July 1, 2002.
Your Conference Committee appointed to confer with a like committee from the Senate upon Engrossed Senate Amendments to Engrossed House Bill No. 1191 respectfully reports that said two committees have conferred and agreed as follows to wit:
that the House recede from its dissent from all Senate amendments and
that the House now concur in all Senate amendments to the bill and that
the bill be further amended as follows:
company to the contract. The net considerations for a given contract
year used to define the minimum nonforfeiture amount shall be an
amount not less than zero and shall be equal to the corresponding gross
considerations credited to the contract during that contract year less
than an annual contract charge of thirty dollars
($30.00) ($30) and less
a collection charge of one dollar and twenty-five cents ($1.25) per
consideration credited to the contract during that contract year. The
percentages of net considerations shall be sixty-five percent (65%) of
the net consideration for the first contract year and eighty-seven and
one-half percent (87.5%) of the net considerations for the second and
later contract years. Notwithstanding the provisions of the preceding
sentence, the percentage shall be sixty-five percent (65%) of the
portion of the total net consideration for any renewal contract year
which exceeds by not more than two (2) times the sum of those
portions of the net considerations in all prior contract years for which
the percentage was sixty-five percent (65%).
(c) With respect to any annuity contract providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations which are paid annually with two (2) exceptions:
(1) The portion of the net consideration for the first contract year to be accumulated shall be the sum of sixty-five percent (65%) of the net consideration for the first contract year plus twenty-two and one-half percent (22.5%) of the excess of the net consideration for the first contract year over the lesser of the net considerations for the second and third contract years.
(2) The annual contract charge shall be the lesser of (i) thirty dollars
($30.00) ($30) or (ii) ten percent (10%) of the gross annual
(d) With respect to any annuity contract providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to ninety percent (90%) and the net consideration shall be the gross consideration less a contract charge of seventy-five dollars
(e) Notwithstanding any other provision of this section, the minimum nonforfeiture amount for any contract issued on or after July 1, 2002, and before July 1, 2004, shall be based on a rate of interest of one and one-half percent (1.5%) per annum.".
insurer conducts that has no specific relation to or dependence on
(b) Surplus remaining in a segregated investment account by virtue of a guarantee by the insurer as described in IC 27-1-5-1 must be included in the assets of the insurer's estate.
(c) A deficit in a segregated investment account by virtue of a guarantee by an insurer as described in IC 27-1-5-1 must be treated as a Class 2 claim under section 40 of this chapter.".
Representative Bodiker Senator Nugent
Representative Yount Senator Mrvan
House Conferees Senate Conferees