Citations Affected:
IC 4-1-8-1
;
IC 6-8-11-12
;
IC 9-25-5-5
;
IC 12-17.6-4-5
; IC 22;
IC 24-4.5-6-201
; IC 27; IC 28; IC 32-8-15.5-10;
IC 34-18-5-3; IC 35-43;
IC 36-8-10-12.
Synopsis: Various insurance matters. Makes conforming amendments
to sections of the Indiana Code that refer to insurance agents and
limited insurance representatives. Imposes limits on the amount a
domestic insurance company may invest in certain securities. Requires
a domestic insurance company to deposit securities of the domestic
insurance company with a custodian and specifies the duties of the
custodian. Amends the law concerning insurance administrators and
provides for reciprocity in the licensure of insurance administrators.
Amends the law concerning reinsurance intermediaries and provides
for reciprocity in the licensure of reinsurance intermediaries. Amends
the clean claims law specifying the period within which an insurer or
a health maintenance organization must notify a provider of claim
deficiencies. Deletes a provision requiring an annual report to the
department of insurance concerning the county sheriff pension trust
fund. Makes conforming amendments. Makes a technical change.
Effective: January 1, 2002 (retroactive); July 1, 2002.
January 15, 2002, read first time and referred to Committee on Insurance, Corporations and
Small Business.
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
perform any service for remuneration or under any contract of hire,
written or oral, express or implied by an employer in any occupation,
but shall not include any of the following:
(a) Persons less than sixteen (16) years of age.
(b) Persons engaged in an independently established trade,
occupation, profession, or business who, in performing the
services in question, are free from control or direction both under
a contract of service and in fact.
(c) Persons performing services not in the course of the
employing unit's trade or business.
(d) Persons employed on a commission basis.
(e) Persons employed by their own parent, spouse, or child.
(f) Members of any religious order performing any service for that
order, any ordained, commissioned, or licensed minister, priest,
rabbi, sexton, or Christian Science reader, and volunteers
performing services for any religious or charitable organization.
(g) Persons performing services as student nurses in the employ
of a hospital or nurses training school while enrolled and
regularly attending classes in a nurses training school chartered
or approved under law, or students performing services in the
employ of persons licensed as both funeral directors and
embalmers as a part of their requirements for apprenticeship to
secure an embalmer's license or a funeral director's license from
the state, or during their attendance at any schools required by law
for securing an embalmer's or funeral director's license.
(h) Persons who have completed a four (4) year course in a
medical school approved by law when employed as interns or
resident physicians by any accredited hospital.
(i) Students performing services for any school, college, or
university in which they are enrolled and are regularly attending
classes.
(j) Persons with physical or mental disabilities performing
services for nonprofit organizations organized primarily for the
purpose of providing employment for persons with disabilities or
for assisting in their therapy and rehabilitation.
(k) Persons employed as insurance agents, producers, insurance
solicitors, and outside salesmen, if all their services are performed
for remuneration solely by commission.
(l) Persons performing services for any camping, recreational, or
guidance facilities operated by a charitable, religious, or
educational nonprofit organization.
(m) Persons engaged in agricultural labor. The term shall include
only services performed:
(1) on a farm, in connection with cultivating the soil, or in
connection with raising or harvesting any agricultural or
horticultural commodity, including the raising, shearing,
feeding, caring for, training, and management of livestock,
bees, poultry, and furbearing animals and wildlife;
(2) in the employ of the owner or tenant or other operator of a
farm, in connection with the operation, management,
conservation, improvement, or maintenance of the farm and its
tools and equipment if the major part of the service is
performed on a farm;
(3) in connection with:
(A) the production or harvesting of maple sugar or maple
syrup or any commodity defined as an agricultural
commodity in the Agricultural Marketing Act, as amended
(12 U.S.C. 1141j);
(B) the raising or harvesting of mushrooms;
(C) the hatching of poultry; or
(D) the operation or maintenance of ditches, canals,
reservoirs, or waterways used exclusively for supplying and
storing water for farming purposes; and
(4) in handling, planting, drying, packing, packaging,
processing, freezing, grading, storing, or delivering to storage,
to market, or to a carrier for transportation to market, any
agricultural or horticultural commodity, but only if service is
performed as an incident to ordinary farming operation or, in
the case of fruits and vegetables, as an incident to the
preparation of fruits and vegetables for market. However, this
exception shall not apply to services performed in connection
with any agricultural or horticultural commodity after its
delivery to a terminal market or processor for preparation or
distribution for consumption.
As used in this subdivision, "farm" includes stock, dairy, poultry,
fruit, furbearing animals, and truck farms, nurseries, orchards, or
greenhouses or other similar structures used primarily for the
raising of agricultural or horticultural commodities.
(n) Those persons employed in executive, administrative, or
professional occupations who have the authority to employ or
discharge and who earn one hundred fifty dollars ($150) or more
a week, and outside salesmen.
(o) Any person not employed for more than four (4) weeks in any
four (4) consecutive three (3) month periods.
due date of such payment. For the purposes of calculating the
assessment under this subsection, the board may consider payments for
temporary total disability, temporary partial disability, permanent total
impairment, permanent partial impairment, or death of an employee.
The board may not consider payments for medical benefits in
calculating an assessment under this subsection. If the amount to the
credit of the second injury fund on or before October 1 of any year
exceeds one million dollars ($1,000,000), the assessment allowed
under this subsection shall not be assessed or collected during the
ensuing year. But when on or before October 1 of any year the amount
to the credit of the fund is less than one million dollars ($1,000,000),
the payments of not more than two and one-half percent (2.5%) of the
total amount of all worker's compensation paid to injured employees or
their beneficiaries under
IC 22-3-2
through
IC 22-3-6
for the calendar
year next preceding that date shall be resumed and paid into the fund.
The board may not use an assessment rate greater than twenty-five
hundredths of one percent (0.25%) above the amount recommended by
the study performed before the assessment.
(d) The board shall enter into a contract with an actuary or another
qualified firm that has experience in calculating worker's compensation
liabilities. Not later than September 1 of each year, the actuary or other
qualified firm shall calculate the recommended funding level of the
fund based on the previous year's claims and inform the board of the
results of the calculation. If the amount to the credit of the fund is less
than the amount required under subsection (c), the board may conduct
an assessment under subsection (c). The board shall pay the costs of the
contract under this subsection with money in the fund.
(e) An assessment collected under subsection (c) on an employer
who is not self-insured must be assessed through a surcharge based on
the employer's premium. An assessment collected under subsection (c)
does not constitute an element of loss, but for the purpose of collection
shall be treated as a separate cost imposed upon insured employers. A
premium surcharge under this subsection must be collected at the same
time and in the same manner in which the premium for coverage is
collected, and must be shown as a separate amount on a premium
statement. A premium surcharge under this subsection must be
excluded from the definition of premium for all purposes, including the
computation of agent insurance producer commissions or premium
taxes. However, an insurer may cancel a worker's compensation policy
for nonpayment of the premium surcharge. A cancellation under this
subsection must be carried out under the statutes applicable to the
nonpayment of premiums.
are required to provide to the board:
(1) not later than January 31 each calendar year; and
(2) not later than thirty (30) days after a change occurs;
the name, address, and electronic mail address of a representative
authorized to receive the notice of an assessment.
shall include only services performed:
(i) on a farm, in the employ of any person, in connection with
cultivating the soil or in connection with raising or harvesting any
agricultural or horticultural commodity, including the raising,
shearing, feeding, caring for, training, and management of
livestock, bees, poultry, and furbearing animals and wildlife;
(ii) in the employ of the owner or tenant or other operator of a
farm, in connection with the operation, management,
conservation, improvement, or maintenance of such farm and its
tools and equipment, or in salvaging timber or clearing land of
brush and other debris left by a hurricane, if the major part of
such service is performed on a farm;
(iii) in connection with the production or harvesting of any
commodity defined as an agricultural commodity in Section 15(g)
of the Agricultural Marketing Act, as amended, or in connection
with the operation or maintenance of ditches, canals, reservoirs,
or waterways, not owned or operated for profit, used exclusively
for supplying and storing water for farming purposes;
(iv)(A) in the employ of the operator of a farm in handling,
planting, drying, packing, packaging, processing, freezing,
grading, storing, or delivering to storage or to market or to a
carrier for transportation to market, in its unmanufactured state,
any agricultural or horticultural commodity; but only if such
operator produced more than one-half (1/2) of the commodity
with respect to which such service is performed;
(B) in the employ of a group of operators of farms (or a
cooperative organization of which such operators are members)
in the performance of service described in subdivision (A), but
only if such operators produce more than one-half (1/2) of the
commodity with respect to which such service is performed;
(C) the provisions of subdivisions (A) and (B) shall not be
deemed to be applicable with respect to service performed in
connection with commercial canning or commercial freezing or
in connection with any agricultural or horticultural commodity
after its delivery to a terminal market for distribution for
consumption; or
(v) on a farm operated for profit if such service is not in the
course of the employer's trade or business or is domestic service
in a private home of the employer.
As used in this subsection, "farm" includes stock, dairy, poultry, fruit,
furbearing animals, and truck farms, nurseries, orchards, greenhouses,
or other similar structures used primarily for the raising of agricultural
or horticultural commodities.
(d) Domestic service in a private home, local college club, or local
chapter of a college fraternity or sorority, except as provided in section
2(m) of this chapter.
(e) Service performed on or in connection with a vessel or aircraft
not an American vessel or American aircraft, if the employee is
employed on and in connection with such vessel or aircraft when
outside the United States.
(f) Service performed by an individual in the employ of child or
spouse, and service performed by a child under the age of twenty-one
(21) in the employ of a parent.
(g) Service not in the course of the employing unit's trade or
business performed in any calendar quarter by an individual, unless the
cash remuneration paid for such service is fifty dollars ($50) or more
and such service is performed by an individual who is regularly
employed by such employing unit to perform such service. For the
purposes of this subsection, an individual shall be deemed to be
regularly employed to perform service not in the course of an
employing unit's trade or business during a calendar quarter only if:
(i) on each of some of twenty-four (24) days during such quarter
such individual performs such service for some portion of the day;
or
(ii) such individual was regularly employed (as determined under
clause (i)) by such employing unit in the performance of such
service during the preceding calendar quarter.
(h) Service performed by an individual in any calendar quarter in
the employ of any organization exempt from income tax under Section
501 of the Internal Revenue Code (except those services included in
sections 2(i) and 2(j) of this chapter if the remuneration for such
service is less than fifty dollars ($50).
(i) Service performed in the employ of a hospital, if such service is
performed by a patient of such hospital.
(j) Service performed in the employ of a school, college, or
university if such service is performed:
(i) by a student who is enrolled and is regularly attending classes
at such school, college, or university; or
(ii) by the spouse of such a student, if such spouse is advised, at
the time such spouse commences to perform such service, that:
(A) the employment of such spouse to perform such service is
provided under a program to provide financial assistance to
such student by such school, college, or university; and
(B) such employment will not be covered by any program of
unemployment insurance.
(k) Service performed by an individual who is enrolled at a
nonprofit or public educational institution which normally maintains a
regular faculty and curriculum and normally has a regularly organized
body of students in attendance at the place where its educational
activities are carried on as a student in a full-time program, taken for
credit at such institution, which combines academic instruction with
work experience, if such service is an integral part of such program,
and such institution has so certified to the employer, except that this
subsection shall not apply to service performed in a program
established for or on behalf of an employer or group of employers.
(l) Service performed in the employ of a government foreign to the
United States of America, including service as a consular or other
officer or employee or a nondiplomatic representative.
(m) Service performed in the employ of an instrumentality wholly
owned by a government foreign to that of the United States of America,
if the service is of a character similar to that performed in foreign
countries by employees of the United States of America or of an
instrumentality thereof, and if the board finds that the Secretary of State
of the United States has certified to the Secretary of the Treasury of the
United States that the government, foreign to the United States, with
respect to whose instrumentality exemption is claimed, grants an
equivalent exemption with respect to similar service performed in such
country by employees of the United States and of instrumentalities
thereof.
(n) Service performed as a student nurse in the employ of a hospital
or nurses' training school by an individual who is enrolled and is
regularly attending classes in a nurses' training school chartered or
approved pursuant to state law; and service performed as an intern in
the employ of a hospital by an individual who has completed a four (4)
year course in a medical school chartered or approved pursuant to state
law.
(o) Service performed by an individual as an insurance agent
producer or as an insurance solicitor, if all such service performed by
such individual is performed for remuneration solely by way of
commission.
(p)(A) Service performed by an individual under the age of eighteen
(18) in the delivery or distribution of newspapers or shopping news, not
including delivery or distribution to any point for subsequent delivery
or distribution.
(B) Services performed by an individual in, and at the time of, the
sale of newspapers or magazines to ultimate consumers, under an
arrangement under which the newspapers or magazines are to be sold
by him at a fixed price, his compensation being based on the retention
of the excess of such price over the amount at which the newspapers or
magazines are charged to him, whether or not he is guaranteed a
minimum amount of compensation for such service, or is entitled to be
credited with the unsold newspapers or magazines turned back.
(q) Service performed in the employ of an international
organization.
(r) Except as provided in
IC 22-4-7-1
, services covered by an
election duly approved by the agency charged with the administration
of any other state or federal unemployment compensation law in
accordance with an arrangement pursuant to
IC 22-4-22-1
through
IC 22-4-22-5
, during the effective period of such election.
(s) If the service performed during one-half (1/2) or more of any pay
period by an individual for an employing unit constitutes employment,
all the services of such individual for such period shall be deemed to
be employment; but if the services performed during more than
one-half (1/2) of any pay period by such an individual do not constitute
employment, then none of the services of such individual for such
period shall be deemed to be employment. As used in this subsection,
"pay period" means a period of not more than thirty-one (31)
consecutive days for which a payment of remuneration is ordinarily
made to the individual by the employing unit. This subsection shall not
be applicable with respect to services performed in a pay period by any
such individual where any such service is excepted by subsection (b).
(t) Service performed by an inmate of a custodial or penal
institution.
(u) Service performed as a precinct election officer (as defined in
IC 3-5-2-40.1
).
credit insurance producer in the sale of consumer credit
insurance.
(2) This section,
IC 24-4.5-6-202
, and
IC 24-4.5-6-203
are not
applicable to a seller whose credit sales consist entirely of sales made
pursuant to a seller credit card issued by a person other than the seller
if the issuer of the card has complied with the provisions of this
section,
IC 24-4.5-6-202
, and
IC 24-4.5-6-203.
(3) This section,
IC 24-4.5-6-202
, and
IC 24-4.5-6-203
apply to a
seller whose credit sales are made using credit cards that:
(a) are issued by a lender;
(b) are in the name of the seller; and
(c) can be used by the buyer or lessee only for purchases or leases
at locations of the named seller.
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 agent 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, agent, 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.
authority, agents' insurance producers' appointments and licenses,
policy forms, rates, authorizations, and other filings and approvals
which existed at the time of the transfer, remain in effect after the
transfer of domicile occurs.
not included in the price as of that date.
(22) "Money market mutual fund" means a mutual fund that
meets the conditions of 17 CFR 270.2a-7, under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
(23) "Multilateral development bank" means an international
development organization of which the United States is a
member.
(24) "Mutual fund" means:
(A) an investment company; or
(B) in the case of an investment company that is organized as
a series company, an investment company series;
that is registered with the United States Securities and Exchange
Commission under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.).
(25) "Obligation" means any of the following:
(A) A bond.
(B) A note.
(C) A debenture.
(D) Any other form of evidence of debt.
(26) "Person" means:
(A) an individual;
(B) a business entity;
(C) a multilateral development bank; or
(D) a government or quasi-governmental body, such as a
political subdivision or a government sponsored enterprise.
(27) "Repurchase transaction" means a transaction in which a life
insurance company purchases securities from a business entity
that is obligated to repurchase the purchased securities or
equivalent securities from the life insurance company at a
specified price, either within a specified period of time or upon
demand.
(28) "Reverse repurchase transaction" means a transaction in
which a life insurance company sells securities to a business
entity and is obligated to repurchase the sold securities or
equivalent securities from the business entity at a specified price,
either within a specified period of time or upon demand.
(29) "Securities lending transaction" means a transaction in which
securities are loaned by a life insurance company to a business
entity that is obligated to return the loaned securities or equivalent
securities to the life insurance company, either within a specified
period of time or upon demand.
(30) "Securities Valuation Office" refers to:
the lease or contract, including but not limited to payments of
principal, interest, and taxes other than the income taxes of the
borrower, and if there is to be left unamortized at the end of
such period an amount not greater than the original appraised
value of the land only, exclusive of all improvements, as
prescribed by law.
(b) Investments of domestic life insurance companies at the time
they are made shall conform to the following categories, conditions,
limitations, and standards:
1. Obligations of a domestic jurisdiction or of any administration,
agency, authority, or instrumentality of a domestic jurisdiction.
2. Obligations guaranteed, supported, or insured as to principal and
interest by a domestic jurisdiction or by an administration, agency,
authority, or instrumentality of a domestic jurisdiction.
3. Obligations issued under or pursuant to the Farm Credit Act of
1971 (12 U.S.C. 2001 through 2279aa-14) as in effect on December 31,
1990, or the Federal Home Loan Bank Act (12 U.S.C. 1421 through
1449) as in effect on December 31, 1990, interest bearing obligations
of the FSLIC Resolution Fund or shares of any institution whose
deposits are insured by the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation to the extent that such shares
are insured, obligations issued or guaranteed by a multilateral
development bank, and obligations issued or guaranteed by the African
Development Bank.
4. Obligations issued, guaranteed, or insured as to principal and
interest by a city, county, drainage district, road district, school district,
tax district, town, township, village, or other civil administration,
agency, authority, instrumentality, or subdivision of a domestic
jurisdiction, providing such obligations are authorized by law and are:
(a) direct and general obligations of the issuing, guaranteeing or
insuring governmental unit, administration, agency, authority,
district, subdivision, or instrumentality;
(b) payable from designated revenues pledged to the payment of
the principal and interest thereof; or
(c) improvement bonds or other obligations constituting a first
lien, except for tax liens, against all of the real estate within the
improvement district or on that part of such real estate not
discharged from such lien through payment of the assessment.
The area to which such improvement bonds or other obligations
relate shall be situated within the limits of a town or city and at
least fifty percent (50%) of the properties within such area shall
be improved with business buildings or residences.
such real estate, which shall be transferred to the life insurance
company or to a trustee or nominee of its choosing. For statement and
deposit purposes, the value of a contract acquired pursuant to this
paragraph shall be whichever of the following amounts is the least:
(a) eighty percent (80%) of the contract price of the real estate;
(b) eighty percent (80%) of the fair value of the real estate at the
time the contract is purchased, such value to be determined in a
manner satisfactory to the department; or
(c) the amount due under the contract.
For the purpose of this paragraph, real estate shall not be deemed
encumbered by reason of the existence in relation thereto of: (1) taxes
or assessment liens not delinquent; (2) instruments creating or
reserving mineral, oil, water or timber rights, rights-of-way, common
or joint driveways, sewers, walls or utility connections; (3) building
restrictions or other restrictive covenants; or (4) an unassigned lease
reserving rents or profits to the owner. Fire insurance upon
improvements constituting a part of the real estate described in the
contract shall be maintained in an amount at least equal to the unpaid
balance due under the contract or the fair value of improvements,
whichever is the lesser.
8. Improved or unimproved real property, whether encumbered or
unencumbered, or any interest therein, held directly or evidenced by
joint venture interests, general or limited partnership interests, trust
certificates, or any other instruments, and acquired by the life insurance
company as an investment, which real property, if unimproved, is
developed within five (5) years. Real property acquired for investment
under this paragraph, whether leased or intended to be developed for
commercial or residential purposes or otherwise lawfully held, is
subject to the following conditions and limitations:
(a) The real estate shall be located in a domestic jurisdiction.
(b) The admitted assets of the life insurance company must
exceed twenty-five million dollars ($25,000,000).
(c) The life insurance company shall have the right to expend
from time to time whatever amount or amounts may be necessary
to conform the real estate to the needs and purposes of the lessee
and the amount so expended shall be added to and become a part
of the investment in such real estate.
(d) The value for statement and deposit purposes of an investment
under this paragraph shall be reduced annually by amortization of
the costs of improvement and development, less land costs, over
the expected life of the property, which value and amortization
shall for statement and deposit purposes be determined in a
manner satisfactory to the commissioner. In determining such
value with respect to the calendar years in which an investment
begins or ends with respect to a point in time other than the
beginning or end of a calendar year, the amortization provided
above shall be made on a proportional basis.
(e) Fire insurance shall be maintained in an amount at least equal
to the insurable value of the improvements or the difference
between the value of the land and the value at which such real
estate is carried for statement and deposit purposes, whichever
amount is smaller.
(f) Real estate acquired in any of the manners described and
sanctioned under section 3 of this chapter, or otherwise lawfully
held, except paragraph 5 of that section which specifically relates
to the acquisition of real estate under this paragraph, shall not be
affected in any respect by this paragraph unless such real estate
at or subsequent to its acquisition fulfills the conditions and
limitations of this paragraph, and is declared by the life insurance
company in a writing filed with the department to be an
investment under this paragraph. The value of real estate acquired
under section 3 of this chapter, or otherwise lawfully held, and
invested under this paragraph shall be initially that at which it was
carried for statement and deposit purposes under that section.
(g) Neither the cost of each parcel of improved real property nor
the aggregate cost of all unimproved real property acquired under
the authority of this paragraph may exceed two percent (2%) of
the life insurance company's admitted assets. For purposes of this
paragraph, "unimproved real property" means land containing no
structures intended for commercial, industrial, or residential
occupancy, and "improved real property" consists of all land
containing any such structure. When applying the limitations of
subparagraph (d) of this paragraph, unimproved real property
becomes improved real property as soon as construction of any
commercial, industrial, or residential structure is so completed as
to be capable of producing income. In the event the real property
is mortgaged with recourse to the life insurance company or the
life insurance company commences a plan of construction upon
real property at its own expense or guarantees payment of
borrowed funds to be used for such construction, the total project
cost of the real property will be used in applying the two percent
(2%) test. Further, no more than ten percent (10%) of the life
insurance company's admitted assets may be invested in all
property, measured by the property value for statement and
deposit purposes as defined in this paragraph, held under this
paragraph at the same time.
9. Deposits of cash in a depository institution, the deposits of which
are insured by the Federal Deposit Insurance Corporation, or
certificates of deposit issued by a depository institution, the deposits of
which are insured by the Federal Deposit Insurance Corporation.
10. Bank and bankers' acceptances and other bills of exchange of
kinds and maturities eligible for purchase or rediscount by federal
reserve banks.
11. Obligations that are issued, guaranteed, assumed, or supported
by a business entity organized under the laws of a domestic jurisdiction
and that are rated:
(a) BBB- or higher by Standard & Poor's Corporation (or A-2 or
higher in the case of commercial paper);
(b) Baa 3 or higher by Moody's Investors Service, Inc. (or P-2 or
higher in the case of commercial paper);
(c) BBB- or higher by Duff and Phelps, Inc. (or D-2 or higher in
the case of commercial paper); or
(d) 1 or 2 by the Securities Valuation Office.
Investments may also be made under this paragraph in obligations
that have not received a rating if the earnings available for fixed
charges of the business entity for the period of its five (5) fiscal years
next preceding the date of purchase shall have averaged per year not
less than one and one-half (1 1/2) times its average annual fixed
charges applicable to such period and if during either of the last two (2)
years of such period such earnings available for fixed charges shall
have been not less than one and one-half (1 1/2) times its fixed charges
for such year. However, if the business entity is a finance company or
other lending institution at least eighty percent (80%) of the assets of
which are cash and receivables representing loans or discounts made
or purchased by it, the multiple shall be one and one-quarter (1 1/4)
instead of one and one-half (1 1/2).
11.(A) Obligations issued, guaranteed, or assumed by a business
entity organized under the laws of a domestic jurisdiction, which
obligations have not received a rating or, if rated, have not received a
rating that would qualify the obligations for investment under
paragraph 11 of this section. Investments authorized by this paragraph
may not exceed ten percent (10%) of the life insurance company's
admitted assets.
12. Preferred stock of, or common or preferred stock guaranteed as
to dividends by, any corporation organized under the laws of a
domestic jurisdiction, which over the period of the seven (7) fiscal
years immediately preceding the date of purchase earned an average
amount per annum at least equal to five percent (5%) of the par value
of its common and preferred stock (or, in the case of stocks having no
par value, of its issued or stated value) outstanding at date of purchase,
or which over such period earned an average amount per annum at least
equal to two (2) times the total of its annual interest charges, preferred
dividends and dividends guaranteed by it, determined with reference
to the date of purchase. No investment shall be made under this
paragraph in a stock upon which any dividend is in arrears or has been
in arrears for ninety (90) days within the immediately preceding five
(5) year period.
13. Common stock of any solvent corporation organized under the
laws of a domestic jurisdiction which over the seven (7) fiscal years
immediately preceding purchase earned an average amount per annum
at least equal to six percent (6%) of the par value of its capital stock
(or, in the case of stock having no par value, of the issued or stated
value of such stock) outstanding at date of purchase, but the conditions
and limitations of this paragraph shall not apply to the special area of
investment to which paragraph 23 of this section pertains.
13.(A) Stock or shares of any mutual fund that:
(a) has been in existence for a period of at least five (5) years
immediately preceding the date of purchase, has assets of not less
than twenty-five million dollars ($25,000,000) at the date of
purchase, and invests substantially all of its assets in investments
permitted under this section; or
(b) is a class one money market mutual fund or a class one bond
mutual fund.
Investments authorized by this paragraph 13(A) in mutual funds having
the same or affiliated investment advisers shall not at any one (1) time
exceed in the aggregate ten percent (10%) of the life insurance
company's admitted assets. The limitations contained in paragraph 22
of this subsection apply to investments in the types of mutual funds
described in subparagraph (a). For the purposes of this paragraph,
"class one bond mutual fund" means a mutual fund that at all times
qualifies for investment using the bond class one reserve factor under
the "Purposes and Procedures of the Securities Valuation Office" or
any successor publication.
The aggregate amount of investments under this paragraph may be
limited by the commissioner if the commissioner finds that investments
under this paragraph may render the operation of the life insurance
company hazardous to the company's policyholders or creditors or to
the general public.
or supported by a foreign jurisdiction or by a business entity organized
under the laws of a foreign jurisdiction and (ii) preferred stock and
common stock issued by any such business entity, if the obligations of
such foreign jurisdiction or business entity, as appropriate, are rated:
(a) BBB- or higher by Standard & Poor's Corporation (or A-2 or
higher in the case of commercial paper);
(b) Baa 3 or higher by Moody's Investors Service, Inc. (or P-2 or
higher in the case of commercial paper);
(c) BBB- or higher by Duff and Phelps, Inc. (or D-2 or higher in
the case of commercial paper); or
(d) 1 or 2 by the Securities Valuation Office.
If the obligations issued by a business entity organized under the laws
of a foreign jurisdiction have not received a rating, investments may
nevertheless be made under this paragraph in such obligations and in
the preferred and common stock of the business entity if the earnings
available for fixed charges of the business entity for a period of five (5)
fiscal years preceding the date of purchase have averaged at least three
(3) times its average fixed charges applicable to such period, and if
during either of the last two (2) years of such period, the earnings
available for fixed charges were at least three (3) times its fixed
charges for such year. in Investments authorized by this paragraph in
a single foreign jurisdiction shall not exceed ten percent (10%) of the
life insurance company's admitted assets. Subject to section 2.2(g) of
this chapter, investments authorized by this paragraph denominated in
foreign currencies shall not in the aggregate exceed ten percent (10%)
of a life insurance company's admitted assets, and investments in any
one (1) foreign currency shall not exceed five percent (5%) of the life
insurance company's admitted assets. Investments authorized by this
paragraph and paragraph 17(B) shall not in the aggregate exceed
twenty percent (20%) of the life insurance company's admitted assets.
This paragraph in no way limits or restricts investments which are
otherwise specifically eligible for deposit under this section.
17.(B) Investments in:
(a) obligations issued, guaranteed, or assumed by a foreign
jurisdiction or by a business entity organized under the laws of a
foreign jurisdiction; and
(b) preferred stock and common stock issued by a business entity
organized under the laws of a foreign jurisdiction;
which investments are not eligible for investment under paragraph
17.(A).
Investments authorized by this paragraph 17(B) shall not in the
aggregate exceed five percent (5%) of the life insurance company's
admitted assets. Subject to section 2.2(g) of this chapter, if investments
authorized by this paragraph 17(B) are denominated in a foreign
currency, the investments shall not, as to such currency, exceed two
percent (2%) of the life insurance company's admitted assets.
Investments authorized by this paragraph 17(B) in any one (1) foreign
jurisdiction shall not exceed two percent (2%) of the life insurance
company's admitted assets.
Investments authorized by paragraph 17(A) of this subsection and
this paragraph 17(B) shall not in the aggregate exceed twenty percent
(20%) of the life insurance company's admitted assets.
18. To protect itself against loss, a company may in good faith
receive in payment of or as security for debts due or to become due,
investments or property which do not conform to the categories,
conditions, limitations, and standards set out above.
19. A life insurance company may purchase for its own benefit any
of its outstanding annuity or insurance contracts or other obligations
and the claims of holders thereof.
20. A life insurance company may make investments although not
conforming to the categories, conditions, limitations, and standards
contained in paragraphs 1 through 11, 12 through 19, and 29 through
30.(A) of this subsection, but limited in aggregate amount to the lesser
of:
(a) ten percent (10%) of the company's admitted assets; or
(b) the aggregate of the company's capital, surplus, and
contingency reserves reported on the statutory financial statement
of the insurer most recently required to be filed with the
commissioner.
This paragraph 20 does not apply to investments authorized by
paragraph 11.(A) of this subsection.
20.(A) Investments under paragraphs 1 through 20 and paragraphs
29 through 30.(A) of this subsection are subject to the general
conditions, limitations, and standards contained in paragraphs 21
through 28 of this subsection.
21. The following requirements concerning investments:
(a) Investments in obligations (other than real estate mortgage
indebtedness) and capital stock of, and in real estate and tangible
personal property leased to, a single corporation, shall not exceed
two percent (2%) of the life insurance company's admitted assets,
taking into account the provisions of section 2.2(h) of this
chapter. The conditions and limitations of this paragraph shall not
apply to investments under paragraph 13(A) of this subsection or
the special area of investment to which paragraph 23 of this
subsection pertains.
(b) Investments in securities of a single issuer and the
affiliates of the single issuer, other than the government of the
United States and subsidiaries of the investing life insurance
company that are authorized under
IC 27-1-23-2.6
, may not
exceed three percent (3%) of the life insurance company's
admitted assets. Investments in the voting securities of a
depository institution or a company that controls a depository
institution may not exceed five percent (5%) of the life
insurance company's admitted assets.
22. Investments in:
(a) preferred stock; and
(b) common stock;
shall not, in the aggregate, exceed twenty percent (20%) of the life
insurance company's admitted assets, exclusive of assets held in
segregated accounts of the nature defined in class 1(c) of
IC 27-1-5-1.
These limitations shall not apply to investments for the special
purposes described in paragraph 23 of this subsection nor to
investments in connection with segregated accounts provided for in
class 1(c) of
IC 27-1-5-1.
23. Investments in subsidiary companies must be made in
accordance with
IC 27-1-23-2.6.
24. No investment, other than commercial bank deposits and loans
on life insurance policies, shall be made unless authorized by the life
insurance company's board of directors or a committee designated by
the board of directors and charged with the duty of supervising loans
or investments.
25. No life insurance company shall subscribe to or participate in
any syndicate or similar underwriting of the purchase or sale of
securities or property or enter into any transaction for such purchase or
sale on account of said company, jointly with any other corporation,
firm, or person, or enter into any agreement to withhold from sale any
of its securities or property, but the disposition of its assets shall at all
times be within its control. Nothing contained in this paragraph shall
be construed to invalidate or prohibit an agreement by two (2) or more
companies to join and share in the purchase of investments for bona
fide investment purposes.
26. No life insurance company may invest in the stocks or
obligations, except investments under paragraphs 9 and 10 of this
subsection, of any corporation in which an officer of such life insurance
company is either an officer or director. However, this limitation shall
not apply with respect to such investments in:
or higher by Standard & Poor's Corporation (or A-2 or
higher in the case of commercial paper), Baa3 or higher by
Moody's Investors Service, Inc. (or P-2 or higher in the case
of commercial paper), BBB- or higher by Duff and Phelps,
Inc. (or D-2 or higher in the case of commercial paper), or
1 or 2 by the Securities Valuation Office;
(ii) a business entity that is a primary dealer in United States
government securities, recognized by the Federal Reserve
Bank of New York; or
(iii) any other business entity approved by the
commissioner; and
(B) the agreement requires the agent to enter into with each
counterparty separate agreements that are consistent with the
requirements of this paragraph.
C. Cash received in a transaction under this paragraph shall be:
(1) invested:
(A) in accordance with this section 2; and
(B) in a manner that recognizes the liquidity needs of the
transaction; or
(2) used by the life insurance company for its general corporate
purposes.
D. For as long as a transaction under this paragraph remains
outstanding, the life insurance company or its agent or custodian shall
maintain, as to acceptable collateral received in the transaction, either
physically or through book entry systems of the Federal Reserve, the
Depository Trust Company, the Participants Trust Company, or another
securities depository approved by the commissioner:
(1) possession of the acceptable collateral;
(2) a perfected security interest in the acceptable collateral; or
(3) in the case of a jurisdiction outside the United States:
(A) title to; or
(B) rights of a secured creditor to;
the acceptable collateral.
E. The limitations set forth in paragraphs 17 and 21 of this
subsection do not apply to transactions under this paragraph 29. For
purposes of calculations made to determine compliance with this
paragraph, no effect may be given to the future obligation of the life
insurance company to:
(1) resell securities, in the case of a repurchase transaction; or
(2) repurchase securities, in the case of a reverse repurchase
transaction.
F. A life insurance company shall not enter into a transaction under
this paragraph if, as a result of the transaction, and after giving effect
to the transaction:
(1) the aggregate amount of securities then loaned, sold to, or
purchased from any one (1) business entity under this paragraph
would exceed five percent (5%) of the company's admitted assets
(but in calculating the amount sold to or purchased from a
business entity under repurchase or reverse repurchase
transactions, effect may be given to netting provisions under a
master written agreement); or
(2) the aggregate amount of all securities then loaned, sold to, or
purchased from all business entities under this paragraph would
exceed forty percent (40%) of the admitted assets of the company
(provided, however, that this limitation does not apply to a reverse
repurchase transaction if the borrowing is used to meet
operational liquidity requirements resulting from an officially
declared catastrophe and is subject to a plan approved by the
commissioner).
G. The following collateral requirements apply to all transactions
under this paragraph:
(1) In a securities lending transaction, the life insurance company
must receive acceptable collateral having a market value as of the
transaction date at least equal to one hundred two percent (102%)
of the market value of the securities loaned by the company in the
transaction as of that date. If at any time the market value of the
acceptable collateral received from a particular business entity is
less than the market value of all securities loaned by the company
to that business entity, the business entity shall be obligated to
deliver additional acceptable collateral to the company, the
market value of which, together with the market value of all
acceptable collateral then held in connection with all securities
lending transactions with that business entity, equals at least one
hundred two percent (102%) of the market value of the loaned
securities.
(2) In a reverse repurchase transaction, other than a dollar roll
transaction, the life insurance company must receive acceptable
collateral having a market value as of the transaction date equal
to at least ninety-five percent (95%) of the market value of the
securities transferred by the company in the transaction as of that
date. If at any time the market value of the acceptable collateral
received from a particular business entity is less than ninety-five
percent (95%) of the market value of all securities transferred by
the company to that business entity, the business entity shall be
obligated to deliver additional acceptable collateral to the
company, the market value of which, together with the market
value of all acceptable collateral then held in connection with all
reverse repurchase transactions with that business entity, equals
at least ninety-five percent (95%) of the market value of the
transferred securities.
(3) In a dollar roll transaction, the life insurance company must
receive cash in an amount at least equal to the market value of the
securities transferred by the company in the transaction as of the
transaction date.
(4) In a repurchase transaction, the life insurance company must
receive acceptable collateral having a market value equal to at
least one hundred two percent (102%) of the purchase price paid
by the company for the securities. If at any time the market value
of the acceptable collateral received from a particular business
entity is less than one hundred percent (100%) of the purchase
price paid by the life insurance company in all repurchase
transactions with that business entity, the business entity shall be
obligated to provide additional acceptable collateral to the
company, the market value of which, together with the market
value of all acceptable collateral then held in connection with all
repurchase transactions with that business entity, equals at least
one hundred two percent (102%) of the purchase price. Securities
acquired by a life insurance company in a repurchase transaction
shall not be:
(A) sold in a reverse repurchase transaction;
(B) loaned in a securities lending transaction; or
(C) otherwise pledged.
30. A life insurance company may invest in obligations or interests
in trusts or partnerships regardless of the issuer, which are secured by:
(a) investments authorized by paragraphs 1, 2, 3, 4, or 11 of this
subsection; or
(b) collateral with the characteristics and limitations prescribed
for loans under paragraph 5 of this subsection.
For the purposes of this paragraph 30, collateral may be substituted for
other collateral if it is in the same amount with the same or greater
interest rate and qualifies as collateral under subparagraph (a) or (b) of
this paragraph.
30.(A) A life insurance company may invest in obligations or
interests in trusts or partnerships, regardless of the issuer, secured by
any form of collateral other than that described in subparagraphs (a)
and (b) of paragraph 30 of this subsection, which obligations or
interests in trusts or partnerships are rated:
(a) A- or higher by Standard & Poor's Corporation or Duff and
Phelps, Inc.;
(b) A 3 or higher by Moody's Investor Service, Inc.; or
(c) 1 by the Securities Valuation Office.
Investments authorized by this paragraph may not exceed ten percent
(10%) of the life insurance company's admitted assets.
31.A. A life insurance company may invest in short-term pooling
arrangements as provided in this paragraph.
B. The following definitions apply throughout this paragraph:
(1) "Affiliate" means, as to any person, another person that,
directly or indirectly through one (1) or more intermediaries,
controls, is controlled by, or is under common control with the
person.
(2) "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract (other than a commercial contract for goods
or non-management services), or otherwise, unless the power is
the result of an official position with or corporate office held by
the person. Control shall be presumed to exist if a person, directly
or indirectly, owns, controls, holds with the power to vote or holds
proxies representing ten percent (10%) or more of the voting
securities of another person. This presumption may be rebutted by
a showing that control does not exist in fact. The commissioner
may determine, after furnishing all interested persons notice and
an opportunity to be heard and making specific findings of fact to
support the determination, that control exists in fact,
notwithstanding the absence of a presumption to that effect.
(3) "Qualified bank" means a national bank, state bank, or trust
company that at all times is not less than adequately capitalized
as determined by standards adopted by United States banking
regulators and that is either regulated by state banking laws or is
a member of the Federal Reserve System.
C. A life insurer may participate in investment pools qualified under
this paragraph that invest only in:
(1) obligations that are rated BBB- or higher by Standard & Poor's
Corporation (or A-2 or higher in the case of commercial paper),
Baa 3 or higher by Moody's Investors Service, Inc. (or P-2 or
higher in the case of commercial paper), BBB- or higher by Duff
and Phelps, Inc. (or D-2 or higher in the case of commercial
paper), or 1 or 2 by the Securities Valuation Office, and have:
business entity affiliated with the company, or a qualified bank
or a business entity registered under the Investment Advisors
Act of 1940 (15 U.S.C. 80a-I et seq.);
(2) the pool manager or an entity designated by the pool manager
of the type set forth in subdivision (1) of this subparagraph F shall
compile and maintain detailed accounting records setting forth:
(A) the cash receipts and disbursements reflecting each
participant's proportionate participation in the investment pool;
(B) a complete description of all underlying assets of the
investment pool (including amount, interest rate, maturity date
(if any) and other appropriate designations); and
(C) other records which, on a daily basis, allow third parties to
verify each participant's interest in the investment pool; and
(3) the assets of the investment pool shall be held in one (1) or
more accounts, in the name of or on behalf of the investment pool,
under a custody agreement or trust agreement with a qualified
bank, which must:
(A) state and recognize the claims and rights of each
participant;
(B) acknowledge that the underlying assets of the investment
pool are held solely for the benefit of each participant in
proportion to the aggregate amount of its participation in the
investment pool; and
(C) contain an agreement that the underlying assets of the
investment pool shall not be commingled with the general
assets of the qualified bank or any other person.
G. The pooling agreement for an investment pool qualified under
this paragraph must be in writing and must include the following
provisions:
(1) Insurers, subsidiaries, or affiliates of insurers holding interests
in the pool, or any pension or profit sharing plan of such insurers
or their subsidiaries or affiliates, shall, at all times, hold one
hundred percent (100%) of the interests in the investment pool.
(2) The underlying assets of the investment pool shall not be
commingled with the general assets of the pool manager or any
other person.
(3) In proportion to the aggregate amount of each pool
participant's interest in the investment pool:
(A) each participant owns an undivided interest in the
underlying assets of the investment pool; and
(B) the underlying assets of the investment pool are held solely
for the benefit of each participant.
purchaser an unrestricted right to return the contract to the company or
to the agent insurance producer through whom it was purchased, on
or before the tenth day after it is received by the purchaser, such return
entitling the purchaser to a return of the value of a variable annuity
account or the monies paid by the purchaser to a fixed account in
connection with the issuance of the contract. This provision shall be
conspicuously placed on the face of the contract. This provision does
not apply to contracts issued in connection with a pension, annuity, or
profit-sharing plan qualified or exempt under Sections 401, 403, 404,
or 501 of the Internal Revenue Code, if participation in the plan is a
condition of employment.
successor publication.
(8) "Money market mutual fund" means a mutual fund that meets
the conditions of 17 CFR 270.2a-7, under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
(9) "Mutual fund" means:
(A) an investment company; or
(B) in the case of an investment company that is organized as
a series company, an investment company series;
that is registered with the United States Securities and Exchange
Commission under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.).
(10) "Obligation" means any of the following:
(A) A bond.
(B) A note.
(C) A debenture.
(D) Any other form of evidence of debt.
(11) "Qualified business entity" means a business entity that is:
(A) an issuer of obligations or preferred stock that is rated one
(1) or two (2) or is rated the equivalent of one (1) or two (2) by
the Securities Valuation Office or by a nationally recognized
statistical rating organization recognized by the Securities
Valuation Office; or
(B) a primary dealer in United States government securities,
recognized by the Federal Reserve Bank of New York.
(12) "Securities Valuation Office" refers to the Securities
Valuation Office of the National Association of Insurance
Commissioners or any successor of the Office established by the
National Association of Insurance Commissioners.
(b) Any company, other than one organized as a life insurance
company, organized under the provisions of IC 27-1 or any other law
of this state and authorized to make any or all kinds of insurance
described in class 2 or class 3 of
IC 27-1-5-1
shall invest its capital or
guaranty fund as follows and not otherwise:
(1) In cash.
(2) In:
(A) direct obligations of the United States; or
(B) obligations secured or guaranteed as to principal and
interest by the United States.
(3) In:
(A) direct obligations; or
(B) obligations secured by the full faith and credit;
of any state of the United States or the District of Columbia.
of a state, territory, or possession of the United States, the District
of Columbia, Canada, or any province of Canada, providing such
obligations are authorized by law and are either:
(A) direct and general obligations of the issuing, guaranteeing,
or insuring governmental unit, administration, agency,
authority, district, subdivision, or instrumentality;
(B) payable from designated revenues pledged to the payment
of the principal and interest of the obligations; or
(C) improvement bonds or other obligations constituting a first
lien, except for tax liens, against all of the real estate within
the improvement district or on that part of such real estate not
discharged from such lien through payment of the assessment.
The area to which the improvement bonds or other obligations
under clause (C) relate must be situated within the limits of a
town or city and at least fifty percent (50%) of the properties
within that area must be improved with business buildings or
residences.
(4) In:
(A) direct obligations; or
(B) obligations secured by the full faith and credit;
of any state of the United States, the District of Columbia, or
Canada or any province thereof.
(5) In obligations guaranteed, supported, or insured as to principal
and interest by the United States, any state, territory, or
possession of the United States, the District of Columbia, Canada,
any province of Canada, or by an administration, agency,
authority, or instrumentality of any of the political units listed in
this subdivision. An obligation is "supported" for the purposes of
this subdivision when repayment of the obligation is secured by
real or personal property of value at least equal to the principal
amount of the indebtedness by means of mortgage, assignment of
vendor's interest in one (1) or more conditional sales contracts,
other title retention device, or by means of other security interest
in the property for the benefit of the holder of the obligation, and
one (1) of the political units listed in this subdivision, or an
administration, agency, authority, or instrumentality listed in this
subdivision, has entered into a firm agreement to rent or use the
property pursuant to which entity is obligated to pay money as
rental or for the use of the property in amounts and at times that
are sufficient, after provision for taxes upon and for other
expenses of the use of the property, to repay in full the
indebtedness, both principal and interest, and when the firm
agreement and the money obligated to be paid under the
agreement are assigned, pledged, or secured for the benefit of the
holder of the obligation. However, where the security consists of
a first mortgage lien or deed of trust on a fee interest in real
property, the obligation may provide for the amortization, during
the initial fixed period of the lease or contract of less than one
hundred percent (100%) of the indebtedness if there is pledged or
assigned, as additional security for the obligation, sufficient
rentals payable under the lease, or of contract payments, to secure
the amortized obligation payments required during the initial,
fixed period of the lease or contract, including but not limited to
payments of principal, interest, and taxes other than the income
taxes of the borrower, and if there is to be left unamortized at the
end of the period an amount not greater than the original
appraised value of the land only, exclusive of all improvements,
as prescribed by law.
(6) In obligations secured by mortgages or deeds of trust or
unencumbered real estate or perpetual leases thereon, in any state
in the United States, the District of Columbia, Canada, or any
province of Canada, not exceeding eighty percent (80%) of the
fair value of the security determined in a manner satisfactory to
the department, except that the percentage stated may be
exceeded if and to the extent that the excess is guaranteed or
insured by the United States, any state, territory, or possession of
the United States, the District of Columbia, Canada, any province
of Canada, or by an administration, agency, authority, or
instrumentality of any of such governmental units. The value of
the real estate must be determined by a method and in a manner
satisfactory to the department. The restrictions contained in this
subdivision do not apply to loans or investments made under
section 5 of this chapter.
(7) In obligations issued under or pursuant to the Farm Credit Act
of 1971 (12 U.S.C. 2001 through 2279aa-14) as in effect on
December 31, 1990, or the Federal Home Loan Bank Act (12
U.S.C. 1421 through 1449) as in effect on December 31, 1990,
interest bearing obligations of the FSLIC Resolution Fund and
shares of any institution that is insured by the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation to
the extent that the shares are insured, obligations issued or
guaranteed by the International Bank for Reconstruction and
Development, obligations issued or guaranteed by the
Inter-American Development Bank, and obligations issued or
guaranteed by the African Development Bank.
(8) In any mutual fund that:
(A) has been registered with the Securities and Exchange
Commission for a period of at least five (5) years immediately
preceding the date of purchase;
(B) has net assets of at least twenty-five million dollars
($25,000,000) on the date of purchase; and
(C) invests substantially all of its assets in investments
permitted under this subsection.
The amount invested in any single mutual fund shall not exceed
ten percent (10%) of admitted assets. The aggregate amount of
investments under this subdivision may be limited by the
commissioner if the commissioner finds that investments under
this subdivision may render the operation of the company
hazardous to the company's policyholders, to the company's
creditors, or to the general public. This subdivision in no way
limits or restricts investments that are otherwise specifically
permitted under this section.
(9) In obligations payable in United States dollars and issued,
guaranteed, assumed, insured, or accepted by a foreign
government or by a solvent business entity existing under the laws
of a foreign government, if the obligations of the foreign
government or business entity meet at least one (1) of the
following criteria:
(A) The obligations carry a rating of at least A3 conferred by
Moody's Investor Services, Inc.
(B) The obligations carry a rating of at least A- conferred by
Standard & Poor's Corporation.
(C) The earnings available for fixed charges of the business
entity for a period of five (5) fiscal years preceding the date of
purchase have averaged at least three (3) times the average
fixed charges of the business entity applicable to the period,
and if during either of the last two (2) years of the period, the
earnings available for fixed charges were at least three (3)
times the fixed charges of the business entity for the year. As
used in this subdivision, the terms "earnings available for fixed
charges" and "fixed charges" have the meanings set forth in
IC 27-1-12-2
(a).
Foreign investments authorized by this subdivision shall not
exceed twenty percent (20%) of the company's admitted assets.
This subdivision in no way limits or restricts investments that are
otherwise specifically permitted under this section. Canada is not
a foreign government for purposes of this subdivision.
(10) In the obligations of any solvent business entity existing
under the laws of the United States, any state of the United States,
the District of Columbia, Canada, or any province of Canada,
provided that interest on the obligations is not in default.
(11) In the preferred or guaranteed shares of any solvent business
entity, so long as the business entity is not and has not been for
the preceding five (5) years in default in the payment of interest
due and payable on its outstanding debt or in arrears in the
payment of dividends on any issue of its outstanding preferred or
guaranteed stock.
(12) In the shares, other than those specified in subdivision (7), of
any solvent business entity existing under the laws of any state of
the United States, the District of Columbia, Canada, or any
province of Canada, and in the shares of any institution wherever
located which has the insurance protection provided by the
Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation. Except for the purpose of mutualization
or for the purpose of retirement of outstanding shares of capital
stock pursuant to amendment of its articles of incorporation, or in
connection with a plan approved by the commissioner for
purchase of such shares by the insurance company's officers,
employees, or agents, or for the elimination of fractional shares,
no company subject to the provisions of this section may invest in
its own stock.
(13) In loans upon the pledge of any mortgage, stocks, bonds, or
other evidences of indebtedness, acceptable as investments under
the terms of this chapter, if the current value of the mortgage,
stock, bond, or other evidences of indebtedness is at least
twenty-five percent (25%) more than the amount loaned on it.
(14) In real estate, subject to subsections (d) and (e).
(15) In securities lending, repurchase, and reverse repurchase
transactions with business entities, subject to the following
requirements:
(A) The company's board of directors shall adopt a written
plan that specifies guidelines and objectives to be followed,
such as:
(i) a description of how cash received will be invested or
used for general corporate purposes of the company;
(ii) operational procedures to manage interest rate risk,
counterparty default risk, and the use of acceptable collateral
in a manner that reflects the liquidity needs of the
transaction; and
(iii) the extent to which the company may engage in these
transactions.
(B) The company shall enter into a written agreement for all
transactions authorized in this subdivision. The written
agreement shall require the termination of each transaction not
more than one (1) year from its inception or upon the earlier
demand of the company. The agreement shall be with the
counterparty business entity but, for securities lending
transactions, the agreement may be with an agent acting on
behalf of the company if the agent is a qualified business entity
and if the agreement:
(i) requires the agent to enter into separate agreements with
each counterparty that are consistent with the requirements
of this section; and
(ii) prohibits securities lending transactions under the
agreement with the agent or its affiliates.
(C) Cash received in a transaction under this section shall be
invested in accordance with this section and in a manner that
recognizes the liquidity needs of the transaction or used by the
company for its general corporate purposes. For as long as the
transaction remains outstanding, the company or its agent or
custodian shall maintain, as to acceptable collateral received
in a transaction under this section, either physically or through
book entry systems of the Federal Reserve, Depository Trust
Company, Participants Trust Company, or other securities
depositories approved by the commissioner:
(i) possession of the acceptable collateral;
(ii) a perfected security interest in the acceptable collateral;
or
(iii) in the case of a jurisdiction outside the United States,
title to, or rights of a secured creditor to, the acceptable
collateral.
(D) For purposes of calculations made to determine
compliance with this subdivision, no effect may be given to
the company's future obligation to resell securities in the case
of a repurchase transaction, or to repurchase securities in the
case of a reverse repurchase transaction. A company shall not
enter into a transaction under this subdivision if, as a result of
and after giving effect to the transaction:
(i) the aggregate amount of securities then loaned, sold to,
or purchased from any one (1) business entity pursuant to
this subdivision would exceed five percent (5%) of its
admitted assets (but, in calculating the amount sold to or
purchased from a business entity pursuant to repurchase or
reverse repurchase transactions, effect may be given to
netting provisions under a master written agreement); or
(ii) the aggregate amount of all securities then loaned, sold
to, or purchased from all business entities under this
subdivision would exceed forty percent (40%) of its
admitted assets.
(E) In a securities lending transaction, the company shall
receive acceptable collateral having a market value as of the
transaction date at least equal to one hundred two percent
(102%) of the market value of the securities loaned by the
company in the transaction as of that date. If at any time the
market value of the acceptable collateral is less than the
market value of the loaned securities, the business entity shall
be obligated to deliver additional acceptable collateral, the
market value of which, together with the market value of all
acceptable collateral then held in connection with the
transaction, at least equals one hundred two percent (102%) of
the market value of the loaned securities.
(F) In a reverse repurchase transaction, the company shall
receive acceptable collateral having a market value as of the
transaction date at least equal to ninety-five percent (95%) of
the market value of the securities transferred by the company
in the transaction as of that date. If at any time the market
value of the acceptable collateral is less than ninety-five
percent (95%) of the market value of the securities so
transferred, the business entity shall be obligated to deliver
additional acceptable collateral, the market value of which,
together with the market value of all acceptable collateral then
held in connection with the transaction, equals at least
ninety-five percent (95%) of the market value of the
transferred securities.
(G) In a repurchase transaction, the company shall receive as
acceptable collateral transferred securities having a market
value equal to at least one hundred two percent (102%) of the
purchase price paid by the company for the securities. If at any
time the market value of the acceptable collateral is less than
one hundred percent (100%) of the purchase price paid by the
company, the business entity shall be obligated to provide
additional acceptable collateral, the market value of which,
together with the market value of all acceptable collateral then
held in connection with the transaction, equals at least one
hundred two percent (102%) of the purchase price. Securities
acquired by a company in a repurchase transaction shall not be
sold in a reverse repurchase transaction, loaned in a securities
lending transaction, or otherwise pledged.
(16) In mortgage backed securities, including collateralized
mortgage obligations, mortgage pass through securities, mortgage
backed bonds, and real estate mortgage investment conduits,
adequately secured by a pool of mortgages, which mortgages are
fully guaranteed or insured by the government of the United
States or any agency of the United States, including the Federal
National Mortgage Association or the Federal Home Loan
Mortgage Corporation.
(17) In mortgage backed securities, including collateralized
mortgage obligations, mortgage pass through securities, mortgage
backed bonds, and real estate mortgage investment conduits,
adequately secured by a pool of mortgages, if the securities carry
a rating of at least:
(A) A3 conferred by Moody's Investor Services, Inc.; or
(B) A- conferred by Standard & Poor's Corporation.
The amount invested in any one (1) obligation or pool of
obligations described in this subdivision shall not exceed five
percent (5%) of admitted assets. The aggregate amount of all
investments under this subdivision shall not exceed ten percent
(10%) of admitted assets.
(18) Any other investment acquired in good faith as payment on
account of existing indebtedness or in connection with the
refinancing, restructuring, or workout of existing indebtedness, if
taken to protect the interests of the company in that investment.
(19) In any other investment. The total of all investments under
this subdivision, except for investments in subsidiary companies
under IC 27-2-9,
IC 27-1-23-2.6
, may not exceed an aggregate
amount of ten percent (10%) of the insurer's admitted assets.
Investments are not permitted under this subdivision:
(A) if expressly prohibited by statute; or
(B) in an insolvent organization or an organization in default
with respect to the payment of principal or interest on its
obligations.
(20) In the case of an insurance company other than a life
insurance company, investments in securities of a single issuer
and affiliates of the single issuer, other than the government
of the United States and subsidiaries of the investing
insurance company that are authorized under
IC 27-1-23-2.6
,
may not exceed three percent (3%) of the insurance
company's admitted assets. Investments in the voting
securities of a depository institution or a company that
controls a depository institution may not exceed five percent
(5%) of the insurance company's admitted assets.
(d) Any company subject to the provisions of this section shall have
power to acquire, hold, or convey real estate, or an interest therein, as
described below, and no other:
(1) Leaseholds, provided the mortgage term shall not exceed
four-fifths (4/5) of the unexpired lease term, including
enforceable renewable options, remaining at the time of the loan,
such real estate or leaseholds to be located in the United States,
any territory or possession of the United States, or Canada, the
value of such leasehold for statement purposes shall be
determined in a manner and form satisfactory to the department.
At the time the leasehold is acquired and approved by the
department, a schedule of annual depreciation shall be set up by
the department in which the value of said leasehold is to be
depreciated, and said depreciation is to be averaged out over not
exceeding a period of fifty (50) years.
(2) The building in which it has its principal office and the land
on which it stands.
(3) Such as shall be necessary for the convenient transaction of its
business.
(4) Such as shall have been acquired for the accommodation of its
business.
(5) Such as shall have been mortgaged to it in good faith by way
of security for loans previously contracted or for money due.
(6) Such as shall have been conveyed to it in connection with its
investments in real estate contracts or its investments in real
estate under lease or for the purpose of leasing or such as shall
have been acquired for the purpose of investment under any law,
order, or regulation authorizing such investment, for statement
purposes, the value of such real estate shall be determined in a
manner satisfactory to the department.
(7) Such as shall have been conveyed to it in satisfaction of debts
previously contracted in the course of its dealings, or in exchange
for real estate so conveyed to it.
(8) Such as it shall have purchased at sales on judgments, decrees,
or mortgages obtained or made for such debts.
requirements pursuant to the laws of a foreign country as a condition
of doing business therein, "Clearing corporation" the term may include
a corporation organized or existing under the laws of any foreign
country and which is legally qualified under such laws to effect
transactions in securities by computerized book entry.
"Custodian" means a national bank, a state bank, or a trust
company that, when acting as a custodian under this section:
(1) is adequately capitalized, according to standards adopted
by United States banking regulators;
(2) is regulated by state banking laws or is a member of the
Federal Reserve System; and
(3) is legally qualified to accept custody of securities under
this section.
With respect to securities issued by an institution that is organized
or existing under the laws of a foreign country or securities used to
meet deposit requirements under the laws of a foreign country as
a condition of doing business in the foreign country, the term
includes a bank or a trust company that is incorporated or
organized under the laws of a foreign country, that is regulated by
the foreign country's government, that, when acting as a custodian
under this section, is adequately capitalized according to standards
adopted by international banking authorities, and that is legally
qualified to accept custody of securities.
"Custodied securities" refers to securities deposited as
described in subsection (b).
"Direct participant" means a bank, trust company, or safety deposit
company approved by the commissioner which maintains an account
in its name in a clearing corporation and through which an insurance
company participates in a clearing corporation.
"Federal Reserve book-entry system" means the computerized
systems sponsored by the United States Department of the Treasury
and certain agencies and instrumentalities of the United States for
holding and transferring securities of the United States government and
such agencies and instrumentalities, respectively, in Federal Reserve
Banks through banks which are members of the Federal Reserve
System, or which otherwise have access to such computerized systems.
"Member bank" means a national bank, state bank or trust company
which is a member of the Federal Reserve System and through which
an insurance company participates in the Federal Reserve book-entry
system.
"Securities" has the meaning set forth in
IC 26-1-8.1-102.
(b) Notwithstanding any other provision of law, a domestic
insurance company may deposit or arrange for the safekeeping of
securities held in or purchased for its general account and its separate
accounts in a clearing corporation or the Federal Reserve book-entry
system. When securities are deposited with a clearing corporation,
certificates representing securities of the same class of the same issuer
may be merged and held in bulk in the name of the nominee of such
clearing corporation with any other securities deposited with such
clearing corporation by any person, regardless of the ownership of such
securities, and certificates representing securities of small
denominations may be merged into one (1) or more certificates of
larger denominations. The records of any member bank through which
an insurance company holds securities in the Federal Reserve
book-entry system, and the records of any custodian through which an
insurance company holds securities in a clearing corporation, shall at
all times show that such securities are held for such insurance company
and for which accounts thereof. Ownership of, and other interests in,
such securities may be transferred by bookkeeping entry on the books
of such clearing corporation or in the Federal Reserve book-entry
system without, in either case, physical delivery of certificates
representing such securities. shall, by written agreement with a
custodian, provide for the deposit of securities of the domestic
insurance company with a custodian. Securities deposited under
this subsection may be held:
(1) by the custodian or an agent of the custodian;
(2) in a clearing corporation; or
(3) in the Federal Reserve book-entry system.
(c) A written agreement under subsection (b) must be
authorized by a resolution of the board of directors or an
authorized committee of the board of directors of the domestic
insurance company, and the terms of the written agreement must
comply with the following:
(1) Certificated securities that are held by the custodian must
be held:
(A) separate from the securities of the custodian and other
customers of the custodian; or
(B) in a fungible bulk of securities as part of a filing of
securities by issue arrangement.
(2) Securities held in a fungible bulk by the custodian and
securities held in a clearing corporation or in the Federal
Reserve book-entry system must be separately identified on
the custodian's official records as follows:
(A) It must be clear that the securities are owned by the
domestic insurance company.
(B) The record must identify which securities are held:
(i) by the custodian or by the custodian's agent;
(ii) in a clearing corporation; and
(iii) in the Federal Reserve book-entry system.
(C) If the securities are held in a clearing corporation or in
the Federal Reserve book-entry system, the record must
identify:
(i) where the securities are;
(ii) if the securities are in a clearing corporation, the
name of the clearing corporation; and
(iii) if the securities are held by the custodian's agent, the
name of the agent.
(3) Custodied securities that are registered must be
registered:
(A) in the name of the domestic insurance company or a
nominee of the domestic insurance company;
(B) in the name of the custodian or a nominee of the
custodian; or
(C) if the custodied securities are in a clearing corporation,
in the name of the clearing corporation or a nominee of the
clearing corporation.
(4) Custodied securities are held subject to the instructions of
the domestic insurance company and are withdrawable upon
the demand of the domestic insurance company. However,
custodied securities that are used to meet the deposit
requirements of
IC 27-1-6
are, to the extent required by
IC 27-1-6
, under the control of the department and may not
be withdrawn by the domestic insurance company unless the
commissioner approves the withdrawal.
(5) The custodian shall send or cause to be sent, electronically
or on paper, to the domestic insurance company:
(A) a confirmation of transfers of custodied securities to or
from the account of the domestic insurance company;
(B) reports of holdings of custodied securities:
(i) at times, but not less than monthly; and
(ii) containing information;
reasonably requested by the domestic insurance company;
and
(C) annual reports of the custodian's trust committee,
including the trust committee's review of the domestic
insurance company's trust accounts.
this subdivision is adequate and appropriate.
(11) The custodian shall indemnify the domestic insurance
company for the loss of custodied securities due to:
(A) negligence or dishonesty of the custodian's officers or
employees;
(B) theft;
(C) mysterious disappearance;
(D) damage; or
(E) destruction.
(12) In case of a loss described in subdivision (11), the
custodian shall promptly replace the custodied securities or
the value of the custodied securities and the value of any loss
of rights or privileges that results from the loss of the
custodied securities.
(13) The written agreement may provide that the custodian is
not liable for a failure to take an action required under the
written agreement if and to the extent that the taking of the
action is prevented or delayed by:
(A) war, whether declared or not;
(B) revolution;
(C) insurrection;
(D) riot;
(E) civil commotion;
(F) act of God;
(G) accident;
(H) fire;
(I) explosion;
(J) stoppage of labor;
(K) strikes or other differences with the custodian's
employees;
(L) laws, regulations, orders, or other acts of a
governmental authority; or
(M) other causes beyond the reasonable control of the
custodian.
(14) If the custodian gains entry in a clearing corporation or
in the Federal Reserve book-entry system through an agent,
there must be a written agreement between the custodian and
the agent under which the agent is subject to the same liability
for loss of custodied securities as the custodian. However, if
the agent is subject to the laws of a jurisdiction other than the
jurisdiction that regulates the custodian, the commissioner
may apply to the agent a standard of liability that is different
from the standard of liability that applies to the custodian.
(15) The custodian shall provide to the insurer's domiciliary
commissioner written notification of:
(A) termination of the written agreement; or
(B) withdrawal of one hundred percent (100%) of the
account assets in any one (1) custody account;
not more than three (3) business days after the termination or
withdrawal occurs.
(d) Any Indiana law requiring an insurance company operating
under the laws of Indiana to deposit assets with the department shall be
deemed complied with if such deposit is made pursuant to a written
agreement between the insurance company and any bank, trust
company or a safety deposit company and approved by the
commissioner which limits withdrawals to those sanctioned and
approved by the department. Deposits so made shall be credited by the
department as deposits in its possession on the basis of the insurance
company's affidavit describing such deposits as to amount and nature.
(d) (e) Notwithstanding any other provisions of law, securities
eligible for deposit under the insurance law of this state relating to
deposit of securities by an insurance company as a condition of
commencing or continuing to do an insurance business in this state
may be deposited with a clearing corporation or held in the Federal
Reserve book-entry system. Securities deposited with a clearing
corporation or held in the Federal Reserve book-entry system and used
to meet the deposit requirements under the insurance laws of this state
shall be under the control of the commissioner and shall not be
withdrawn by the insurance company without the approval of the
commissioner. Any insurance company holding such securities in such
manner shall provide to the commissioner evidence issued by its
custodian or a member bank through which such insurance company
has deposited securities with a clearing corporation or held in the
Federal Reserve book-entry system, respectively, in order to establish
that the securities are actually recorded in an account in the name of the
custodian or other direct participant or member bank and evidence that
the records of the custodian, other participant or member bank reflect
that such securities are held subject to the order of the commissioner.
(e) (f) The commissioner of insurance is authorized to promulgate
rules and regulations governing the deposit by insurance companies of
securities with clearing corporations and in the Federal Reserve
book-entry system.
Sec. 30. (a) No company acting through its officers or members,
attorney-in-fact, or by any other party, no officer of a company acting
on his own behalf and no insurance agent, producer, broker, or
solicitor, personally or by any other party, shall offer, promise, allow,
give, set off or pay, directly or indirectly, any rebate of or part of the
premium payable on a policy, or any agent's insurance producer's
commission thereon, or earnings, profits, dividends or other benefits
founded, arising, accruing, or to accrue thereon or therefrom, or any
special advantage in date of policy or age of issue, or any paid
employment or contract for services of any kind, or any other valuable
consideration or inducement, to or for insurance on any risk in this
state, now or hereafter to be written, or for or upon any renewal of any
such insurance, which is not specified in the policy contract of
insurance, or offer, promise, give, option, sell or purchase any stocks,
bonds, securities, or property, or any dividends or profits accruing or
to accrue thereon, or other thing of value whatsoever as inducement to
insurance or in connection therewith, or any renewal thereof, which is
not specified in the policy. Nothing in this section shall prevent a
company which transacts industrial life insurance on a weekly payment
plan from returning to policyholders who have made a premium
payment for a period of at least one (1) year directly to the company at
its home or district office a percentage of premium which the company
would otherwise have paid for the weekly collection of such premium,
nor shall this section be construed to prevent the taking of a bona fide
obligation, with legal interest, in payment of any premium.
(b) No insured person or party or applicant for insurance shall
directly or indirectly, receive or accept, or agree to receive or accept,
any rebate of premium or of any part thereof, or all or any part of any
agent's insurance producer's or broker's commission thereon, or any
favor or advantage, or share in any benefit to accrue under any policy
of insurance, or any valuable consideration or inducement, other than
such as are specified in the policy.
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.
(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 he shall adopt, the commissioner may, 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 may make such examination as he 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 his reasons
therefor, filed with the commissioner, 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
agent, producer, or insured in order to ascertain compliance with any
filing for rate or coverage which is in effect. He 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:
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, he shall immediately issue a
written order to the parties specifying in detail in what respects and
upon what evidence such noncompliance exists and 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, he 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.
(f) All actions of the commissioner under this chapter and all
appeals from his action shall be governed by IC 4-21.5, except where
a different specific provision is made in this chapter.
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 his own motion, or upon timely written request by any agent
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.
FOLLOWS [EFFECTIVE JANUARY 1, 2002 (RETROACTIVE)]:
Sec. 19. Nothing in this chapter abridges or restricts the freedom of
contract of insurers, agents, insurance producers, or brokers with
reference to the amount of commission to be paid to agents insurance
producers or brokers by insurers, and such payments are expressly
authorized.
company of the primary company.
(g) In addition to investments in common stock, preferred stock,
debt obligations, and other securities as permitted under
IC 27-1-12-2
or
IC 27-1-13-3
, a primary company to which this section applies may,
directly or through one (1) or more subsidiary companies, also do the
following:
(1) Invest in common stock, preferred stock, debt obligations, and
other securities of one (1) or more subsidiary companies, amounts
that in total do not exceed the lesser of ten percent (10%) of the
primary company's admitted assets or fifty percent (50%) of the
primary company's surplus as regards policyholders, if, after the
investments, the primary company's surplus as regards
policyholders is reasonable in relation to the primary company's
outstanding liabilities and adequate to the primary company's
financial needs. In calculating the amount of investments
permitted under this subdivision:
(A) investments, whether made directly or through one (1) or
more subsidiary companies, in domestic or foreign insurance
subsidiary companies and health maintenance organizations
must be excluded; and
(B) to the extent that expenditures relate to an investment
other than an investment described in clause (A), the following
must be included:
(i) Total net money or other consideration expended and
obligations assumed in the acquisition or formation of a
subsidiary company, including all organizational expenses
and contributions to capital and surplus of the subsidiary
company, whether or not represented by the purchase of
capital stock or issuance of other securities.
(ii) all amounts expended in acquiring additional common
stock, preferred stock, debt obligations, and other securities
and all contributions to the capital or surplus of a subsidiary
company subsequent to the subsidiary company's acquisition
or formation must be included.
(2) Notwithstanding subdivision (1), invest an amount in common
stock, preferred stock, debt obligations, and other securities of
one (1) or more subsidiary companies engaged or organized to
engage exclusively in the ownership and management of assets
authorized as investments for the primary company, if the
subsidiary company agrees to limit the subsidiary company's
investment in an asset so that, when combined with the
investments of the primary company, the total investment of the
primary company will not exceed the investment limitations
described in subdivision (1) or in any applicable provision of
IC 27-1-12-2
or
IC 27-1-13-3.
(3) Notwithstanding subdivision (1), with the prior approval of
the commissioner, invest a greater amount in common stock,
preferred stock, debt obligations, or other securities of one (1) or
more subsidiary companies, if, after the investment, the primary
company's surplus as regards policyholders is reasonable in
relation to the primary company's outstanding liabilities and
adequate to the primary company's financial needs.
(h) Investments that are made under this section in common stock,
preferred stock, debt obligations, or other securities of a subsidiary
company are not subject to restrictions or prohibitions under
IC 27-1-12-2
or
IC 27-1-13-3
that otherwise apply to investments of
primary companies.
(i) Before a primary company to which this section applies makes
an investment described in subsection (g), a primary company shall
make a determination regarding whether the proposed investment
meets the applicable requirements by determining the applicable
investment limitations as though the investment has been made,
considering:
(1) the currently outstanding principal balance on previous
investments in debt obligations; and
(2) the value of previous investments in equity securities as of the
day that the investments in equity securities were made;
net of any return of capital invested.
(j) If a primary company ceases to control a subsidiary company, the
primary company shall dispose of any investment in the subsidiary
company made under this section not more than:
(1) three (3) years from the time of the cessation of control; or
(2) the period determined appropriate by the commissioner;
unless the investment meets the requirements for investment under any
applicable provision of
IC 27-1-12-2
or
IC 27-1-13-3
and the primary
company has notified the commissioner that the investment meets the
requirements.
(k) A primary company, at the time of establishing a subsidiary
company, must possess:
(1) assets of not less than twenty-five million dollars
($25,000,000); or
(2) not less than three million five hundred thousand dollars
($3,500,000) of:
(A) combined capital and surplus in the case of a stock
company; and
(B) surplus in the case of a mutual company.
(l) The department has the power to:
(1) conduct periodic examinations of a subsidiary company;
(2) require reports that reflect the effect of the condition and
operation of a subsidiary company on the financial condition of
a primary company; and
(3) make additional examinations or require other reports with
respect to a subsidiary company that are necessary to carry out the
purposes of this section.
A noninsurance subsidiary company shall annually furnish the
department financial statements that are prepared under generally
accepted accounting principles and certified by an independent
certified public accountant and the department may rely on the
statements. If a subsidiary company conducts the business of the
subsidiary company in a manner that clearly tends to impair the capital
or surplus fund of the primary company, or otherwise makes the
operation of the primary company financially unsafe, the department
may act under
IC 27-1-3-19
with respect to the primary company.
(m) A primary company and a subsidiary company shall, in all
respects, stand before the law as separate and distinct companies and
neither company is liable to the creditors, policyholders, or
stockholders of the other company, acts or omissions of an officer,
director, stockholder, or member of either company notwithstanding.
(n) The board of directors and officers of a primary company and a
subsidiary company may be identical. However, the affairs of each
company shall be carried on separate and distinct from the other
company.
(o) A foreign subsidiary company shall be treated in the same
manner as other foreign companies, except that the treatment may be
withheld or suspended with respect to a subsidiary company that is
domiciled in a state that does not treat a:
(1) primary company; or
(2) subsidiary company;
that is domiciled in Indiana in a manner equal to a foreign or domestic
company doing business in the other state.
(p) Interests in a subsidiary company that are owned by a primary
company must be registered in the name of the primary company
except for shares that are required under Indiana law to be registered
in the name of another person.
JULY 1, 2002]: Sec. 1. As used in this chapter:
(a) "Administrator", except as provided in section 7.5 of this
chapter, means a person who directly or indirectly underwrites,
collects charges or premiums from, or who adjusts or settles claims on
residents of Indiana in connection with life, annuity, or health
insurance coverage or annuities, whether offered or provided for by an
insurer. or a self-funded plan. The term "administrator" does not
include the following persons:
(1) An employer for its or a wholly owned direct or indirect
subsidiary of an employer acting on behalf of the employees or
for the employees of: a
(A) the employer;
(B) the subsidiary; or
(C) an affiliated corporation of the employer.
(2) A union acting for its members.
(3) An insurer. including:
(A) an insurer operating a health maintenance organization or
a limited service health maintenance organization; and
(B) the sales representative of an insurer operating a health
maintenance organization or a limited service health
maintenance organization when that sales representative is
licensed in Indiana and when it is engaged in the performance
of its duties as the sales representative.
(4) A life or health An insurance agent producer:
(A) that is licensed under
IC 27-1-15.6
;
(B) that has:
(i) a life; or
(ii) an accident and health or sickness;
qualification under
IC 27-1-15.6-7
; and
(C) whose activities are limited exclusively to the sale of
insurance.
(5) A creditor acting for its debtors regarding insurance covering
a debt between them.
(6) A trust established under 29 U.S.C. 186 and the trustees,
agents, and employees acting pursuant to that trust.
(7) A trust that is exempt from taxation under Section 501(a) of
the Internal Revenue Code and:
(A) the trustees and employees acting pursuant to that trust; or
(B) a custodian and the agents and employees of the custodian
acting pursuant to a custodian account that meets the
requirements of Section 401(f) of the Internal Revenue Code.
(8) A financial institution that is subject to supervision or
examination by federal or state banking authorities to the extent
that the financial institution collects and remits premiums to
an insurance producer or an authorized insurer in connection
with a loan payment.
(9) A credit card issuing company that:
(A) advances for; and
(B) collects from, when a credit card holder authorizes the
collection;
credit card holders of the credit card issuing company,
insurance premiums or charges. from its credit cardholders as
long as that company does not adjust or settle claims.
(10) An individual who A person that adjusts or settles claims in
the normal course of his the person's practice or employment as
an attorney at law and who that does not collect charges or
premiums in connection with life, annuity, or health insurance
coverage. or annuities.
(11) A health maintenance organization that has a certificate of
authority issued under IC 27-13.
(12) A limited service health maintenance organization that has
a certificate of authority issued under IC 27-13.
(13) A mortgage lender to the extent that the mortgage lender
collects and remits premiums to an insurance producer or an
authorized insurer in connection with a loan payment.
(14) A person that:
(A) is licensed as a managing general agent as required
under
IC 27-1-33
; and
(B) acts exclusively within the scope of activities provided
for under the license referred to in clause (A).
(15) A person that:
(A) directly or indirectly underwrites, collects charges or
premiums from, or adjusts or settles claims on, residents
of Indiana in connection with life, annuity, or health
coverage provided by an insurer;
(B) is affiliated with the insurer; and
(C) performs the duties specified in clause (A) only
according to a contract between the person and the insurer
for the direct and assumed life, annuity, or health coverage
provided by the insurer.
(b) "Certificate of registration" refers to the certificate required by
section 11 of this chapter. "Affiliate" means an entity or a person
that:
(1) directly or indirectly through an intermediary controls or
is controlled by; or
(2) is under common control with;
a specified entity or person.
(c) "Church plan" has the meaning set forth in
IC 27-8-10-1.
(d) "Commissioner" refers to the insurance commissioner
appointed under
IC 27-1-1-2.
(d) (e) "Control" means the direct or indirect possession of the
power to direct or cause the direction of the management and
policies of a person, whether:
(1) through ownership of voting securities;
(2) by contract other than a commercial contract for goods or
nonmanagement services; or
(3) otherwise;
unless the power is the result of an official position with the person
or a corporate office held by the person. Control is presumed to
exist if a person directly or indirectly owns, controls, holds with the
power to vote, or holds proxies representing not less than ten
percent (10%) of the voting securities of another person.
(f) "Covered individual" means an individual who is covered
under a benefit program provided by an insurer.
(g) "Financial institution" means a bank, savings association, credit
union, or any other institution regulated under IC 28 or federal law.
(e) (h) "GAAP" refers to consistently applied United States
generally accepted accounting principles.
(i) "Governmental plan" has the meaning set forth in
IC 27-8-10-1.
(j) "Home state" means the District of Columbia or any state or
territory of the United States in which an administrator is
incorporated or maintains the administrator's principal place of
business. If the place in which the administrator is incorporated or
maintains the administrator's principal place of business is not
governed by a law that is substantially similar to this chapter, the
administrator's home state is another state:
(1) in which the administrator conducts the business of the
administrator; and
(2) that the administrator declares is the administrator's
home state.
(k) "Insurance producer" has the meaning set forth in
IC 27-1-15.6-2.
(l) "Insurer" means:
(1) a person who obtains a certificate of authority under:
(A)
IC 27-1-3-20
;
a period of not less than five (5) years after the termination of the
trust.
(d) The written agreement required under subsection (a) must
contain provisions concerning the standard of underwriting required by
the insurer. employer, employee group, or any other group that is a
party to the agreement.
(e) The commissioner may require any written agreement executed
by an administrator and an insurer employer, employee group, or any
other group to be filed with the department of insurance at the time the
administrator applies for a certificate of registration, as required by
section 11 of license under this chapter. The commissioner may
require any written agreement executed subsequent to the original issue
of the certificate of registration license to the administrator to be filed
with the department at the time the administrator is applying for
renewal of the certificate of registration. license.
administrator has entered into a written agreement under
section 2 of this chapter to a new administrator if:
(A) the agreement between the administrator and the
insurer is canceled; and
(B) a written agreement for a transfer of the books and
records is made between the administrator and the
insurer.
If the books and records are transferred to a new administrator
under subdivision (2), the new administrator shall acknowledge in
writing that the new administrator is responsible for retaining the
books and records of the prior administrator as required under
subdivision (1). The books and records must be maintained in
accordance with generally accepted standards of insurance
bookkeeping. record keeping.
(b) The commissioner is entitled to inspect all books and records of
the administrator for the purpose of examinations and audits. Trade
secrets contained within those books and records, including the identity
and addresses of policyholders and certificate holders, are to remain
confidential. However, the commissioner may use that confidential
information in proceedings instituted against the administrator.
(c) Any insurer, employer, employee group, or any other group
using the services of the administrator is entitled to inspect the books
and records of the administrator to the extent necessary for it to fulfill
all of its contractual obligations to insured or covered persons. The
right of the insurer, employer, employee group, or other group using the
services of an administrator under this subsection is subject to any
restrictions contained in the written agreement between such party and
administrator. An insurer owns records that:
(1) are generated by an administrator with which the insurer
has entered into a written agreement under section 2 of this
chapter; and
(2) pertain to the insurer.
However, the administrator retains the right to continuing access
to books and records necessary to fulfill the administrator's
contractual obligations to covered individuals, claimants, and the
insurer.
(d) An administrator that is licensed under section 11.1 of this
chapter shall make available for inspection by the commissioner
copies of written agreements with insurers.
(e) An administrator that is licensed under section 11.1 of this
chapter shall:
(1) produce the administrator's accounts, records, and files
for examination; and
(2) make the administrator's officers available to provide
information concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(f) An administrator that is licensed under section 11.1 of this
chapter shall immediately notify the commissioner of a material
change in:
(1) the ownership or control of the administrator; or
(2) another fact or circumstance that affects the
administrator's qualification for a license.
The commissioner, upon receiving notice under this subsection,
shall report the change to an electronic data base maintained by
the NAIC or an affiliate or a subsidiary of the NAIC.
(g) An administrator that is licensed under section 11.1 of this
chapter and that administers a governmental plan or a church plan
shall:
(1) maintain a surety bond for the use and benefit of:
(A) the commissioner; and
(B) the insurance regulator of any state in which the
administrator is authorized to conduct business; and
(2) cover an individual and a person that has remitted
premiums, insurance, charges, or other money to the
administrator in the course of the administrator's business;
in an amount equal to the greater of one hundred thousand dollars
($100,000) or ten percent (10%) of the total of funds administered
in connection with governmental plans or church plans in Indiana
and all other states in which the administrator is authorized to
conduct business.
do so.
statement or report must include a columnar consolidating or
combining worksheet that includes the amounts shown on the
consolidated audited financial statement or report, separately
reported on the worksheet for each entity included on the
statement or report, and an explanation of consolidating and
eliminating entries.
(5) Information determined by the commissioner to be
necessary for a review of the current financial condition of the
applicant.
(6) A description of the business plan of the applicant,
including:
(A) information on staffing levels and activities proposed
in Indiana and nationwide; and
(B) details concerning the applicant's ability to provide a
sufficient number of experienced and qualified personnel
for:
(i) claims processing;
(ii) record keeping; and
(iii) underwriting.
(7) Other information required by the commissioner.
(c) An administrator that applies for licensure under this section
shall make copies of written agreements with insurers available for
inspection by the commissioner.
(d) An administrator that applies for licensure under this
section shall:
(1) produce the administrator's accounts, records, and files
for examination; and
(2) make the administrator's officers available to provide
information concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(e) The commissioner may refuse to issue a license under this
section if the commissioner determines that:
(1) the administrator or an individual who is responsible for
the conduct of the affairs of the administrator:
(A) is not:
(i) competent;
(ii) trustworthy;
(iii) financially responsible; or
(iv) of good personal and business reputation; or
(B) has had an:
(i) insurance certificate of authority or insurance license;
or
revocation or suspension of the nonresident administrator's home
state license.
(i) If the commissioner makes a determination described in
subsection (h), the commissioner:
(1) shall provide written notice of the determination to the
insurance regulator of the nonresident administrator's home
state; and
(2) may delay the issuance of a nonresident administrator
license to the nonresident administrator until the
commissioner determines that the nonresident administrator
is able to comply with this chapter and that grounds do not
exist for the home state's revocation or suspension of the
nonresident administrator's home state license.
a felony, without regard to whether adjudication is withheld;
(7) the administrator's license has been suspended or revoked
in another state; or
(8) the administrator fails to timely file the:
(A) report required under section 12.3 of this chapter; or
(B) statement and filing fee required under section 12.2(e)
of this chapter.
(c) The commissioner may, in the commissioner's discretion and
without advance notice or hearing, immediately suspend the license
of an administrator if the commissioner finds one (1) or more of
the following:
(1) The administrator is insolvent or financially impaired.
(2) A proceeding for receivership, conservatorship,
rehabilitation, or other delinquency proceeding regarding the
administrator has been commenced in any state.
(3) The financial condition or business practices of the
administrator pose an imminent threat to the public health,
safety, or welfare of residents of Indiana.
(d) If the commissioner determines that one (1) or more grounds
exist for the suspension or revocation of a license issued under this
chapter, the commissioner may, instead of suspension or
revocation, impose a civil penalty not to exceed twenty-five
thousand dollars ($25,000) upon the administrator. A civil penalty
imposed under this subsection may be enforced in the same
manner as a civil judgment. Civil penalties collected under this
subsection shall be deposited in the state general fund.
regular salaried employee who devotes substantially all of his
time to the business of such bureau or association.
(4) Any licensed agent insurance producer or an authorized
insurer or officer or employee of the same who adjusts losses for
such insurer, and any agent insurance producer or representative
of a farmers' mutual insurance company operating under the
farmers' mutual insurance laws of this state on behalf of an
insurer.
(5) Any independent adjuster representing an insurer.
of any year, the certificate of authority sought to be renewed shall
continue in full force and effect until the issuance by the commissioner
of insurance of the new certificate applied for or until five (5) days
after the commissioner of insurance shall have refused to issue such
new certificate and shall have served notice of such refusal on the
applicant therefor. Service of such notice shall be made by registered
mail directed to the applicant at the place of business specified in the
application.
(e) The applicant shall file with the commissioner of insurance a
surety bond in a sum equal to ten thousand dollars ($10,000) payable
to the state of Indiana and conditioned on the principal's faithful
performance and discharge of his duties under this title and under any
rule of the department of insurance. The bond must be renewed
annually.
television station, or in any other way;
an advertisement, an announcement, or a statement containing an
assertion, a representation, or a statement regarding the RBC level of
an insurer or any component derived in the calculation of the RBC
level of an insurer is misleading and is prohibited.
(b) If:
(1) a materially false statement with respect to the comparison
regarding an insurer's total adjusted capital to an RBC level of the
insurer or an inappropriate comparison of any other amount to the
insurer's RBC levels is published in any written publication; and
(2) the insurer is able to demonstrate to the commissioner with
substantial proof the:
(A) falsity; or
(B) inappropriateness;
of the statement;
the insurer may publish an announcement in a written publication if the
sole purpose of the announcement is to rebut the materially false
statement.
policies;
(C) making any misleading representation or any
misrepresentation as to the financial condition of any insurer,
or as to the legal reserve system upon which any life insurer
operates;
(D) using any name or title of any policy or class of policies
misrepresenting the true nature thereof; or
(E) making any misrepresentation to any policyholder insured
in any company for the purpose of inducing or tending to
induce such policyholder to lapse, forfeit, or surrender his
insurance.
(2) Making, publishing, disseminating, circulating, or placing
before the public, or causing, directly or indirectly, to be made,
published, disseminated, circulated, or placed before the public,
in a newspaper, magazine, or other publication, or in the form of
a notice, circular, pamphlet, letter, or poster, or over any radio or
television station, or in any other way, an advertisement,
announcement, or statement containing any assertion,
representation, or statement with respect to any person in the
conduct of his insurance business, which is untrue, deceptive, or
misleading.
(3) Making, publishing, disseminating, or circulating, directly or
indirectly, or aiding, abetting, or encouraging the making,
publishing, disseminating, or circulating of any oral or written
statement or any pamphlet, circular, article, or literature which is
false, or maliciously critical of or derogatory to the financial
condition of an insurer, and which is calculated to injure any
person engaged in the business of insurance.
(4) Entering into any agreement to commit, or individually or by
a concerted action committing any act of boycott, coercion, or
intimidation resulting or tending to result in unreasonable
restraint of, or a monopoly in, the business of insurance.
(5) Filing with any supervisory or other public official, or making,
publishing, disseminating, circulating, or delivering to any person,
or placing before the public, or causing directly or indirectly, to
be made, published, disseminated, circulated, delivered to any
person, or placed before the public, any false statement of
financial condition of an insurer with intent to deceive. Making
any false entry in any book, report, or statement of any insurer
with intent to deceive any agent or examiner lawfully appointed
to examine into its condition or into any of its affairs, or any
public official to which such insurer is required by law to report,
or which has authority by law to examine into its condition or into
any of its affairs, or, with like intent, willfully omitting to make a
true entry of any material fact pertaining to the business of such
insurer in any book, report, or statement of such insurer.
(6) Issuing or delivering or permitting agents, officers, or
employees to issue or deliver, agency company stock or other
capital stock, or benefit certificates or shares in any common law
corporation, or securities or any special or advisory board
contracts or other contracts of any kind promising returns and
profits as an inducement to insurance.
(7) Making or permitting any of the following:
(A) Unfair discrimination between individuals of the same
class and equal expectation of life in the rates or assessments
charged for any contract of life insurance or of life annuity or
in the dividends or other benefits payable thereon, or in any
other of the terms and conditions of such contract; however, in
determining the class, consideration may be given to the
nature of the risk, plan of insurance, the actual or expected
expense of conducting the business, or any other relevant
factor.
(B) Unfair discrimination between individuals of the same
class involving essentially the same hazards in the amount of
premium, policy fees, assessments, or rates charged or made
for any policy or contract of accident or health insurance or in
the benefits payable thereunder, or in any of the terms or
conditions of such contract, or in any other manner whatever;
however, in determining the class, consideration may be given
to the nature of the risk, the plan of insurance, the actual or
expected expense of conducting the business, or any other
relevant factor.
(C) Excessive or inadequate charges for premiums, policy
fees, assessments, or rates, or making or permitting any unfair
discrimination between persons of the same class involving
essentially the same hazards, in the amount of premiums,
policy fees, assessments, or rates charged or made for:
(i) policies or contracts of reinsurance or joint reinsurance,
or abstract and title insurance;
(ii) policies or contracts of insurance against loss or damage
to aircraft, or against liability arising out of the ownership,
maintenance, or use of any aircraft, or of vessels or craft,
their cargoes, marine builders' risks, marine protection and
indemnity, or other risks commonly insured under marine,
as distinguished from inland marine, insurance; or
(iii) policies or contracts of any other kind or kinds of
insurance whatsoever.
However, nothing contained in clause (C) shall be construed to
apply to any of the kinds of insurance referred to in clauses (A)
and (B) nor to reinsurance in relation to such kinds of insurance.
Nothing in clause (A), (B), or (C) shall be construed as making or
permitting any excessive, inadequate, or unfairly discriminatory
charge or rate or any charge or rate determined by the department
or commissioner to meet the requirements of any other insurance
rate regulatory law of this state.
(8) Except as otherwise expressly provided by law, knowingly
permitting or offering to make or making any contract or policy
of insurance of any kind or kinds whatsoever, including but not in
limitation, life annuities, or agreement as to such contract or
policy other than as plainly expressed in such contract or policy
issued thereon, or paying or allowing, or giving or offering to pay,
allow, or give, directly or indirectly, as inducement to such
insurance, or annuity, any rebate of premiums payable on the
contract, or any special favor or advantage in the dividends,
savings, or other benefits thereon, or any valuable consideration
or inducement whatever not specified in the contract or policy; or
giving, or selling, or purchasing or offering to give, sell, or
purchase as inducement to such insurance or annuity or in
connection therewith, any stocks, bonds, or other securities of any
insurance company or other corporation, association, limited
liability company, or partnership, or any dividends, savings, or
profits accrued thereon, or anything of value whatsoever not
specified in the contract. Nothing in this subdivision and
subdivision (7) shall be construed as including within the
definition of discrimination or rebates any of the following
practices:
(A) Paying bonuses to policyholders or otherwise abating their
premiums in whole or in part out of surplus accumulated from
nonparticipating insurance, so long as any such bonuses or
abatement of premiums are fair and equitable to policyholders
and for the best interests of the company and its policyholders.
(B) In the case of life insurance policies issued on the
industrial debit plan, making allowance to policyholders who
have continuously for a specified period made premium
payments directly to an office of the insurer in an amount
which fairly represents the saving in collection expense.
under a contract or policy of insurance for charges incurred by an
insured in such a for-profit hospital or other for-profit medical
facility licensed by the state department of health.
(15) Refusing to insure an individual, refusing to continue to issue
insurance to an individual, limiting the amount, extent, or kind of
coverage available to an individual, or charging an individual a
different rate for the same coverage, solely because of that
individual's blindness or partial blindness, except where the
refusal, limitation, or rate differential is based on sound actuarial
principles or is related to actual or reasonably anticipated
experience.
(16) Committing or performing, with such frequency as to
indicate a general practice, unfair claim settlement practices (as
defined in section 4.5 of this chapter).
(17) Between policy renewal dates, unilaterally canceling an
individual's coverage under an individual or group health
insurance policy solely because of the individual's medical or
physical condition.
(18) Using a policy form or rider that would permit a cancellation
of coverage as described in subdivision (17).
(19) Violating
IC 27-1-22-25
or
IC 27-1-22-26
concerning motor
vehicle insurance rates.
(20) Violating
IC 27-8-21-2
concerning advertisements referring
to interest rate guarantees.
(21) Violating
IC 27-8-24.3
concerning insurance and health plan
coverage for victims of abuse.
(22) Violating
IC 27-8-26
concerning genetic screening or testing.
(23) Violating
IC 27-1-15.6-3
(b) concerning licensure of
insurance producers.
insurance companies.
and if such company be a foreign insurance company then such appeal
may be taken by such company to the circuit or superior court of
Marion County.
insurance producer or representative of such company who is exempt
from the provisions of
IC 27-1-15.6
at the time said election becomes
effective may continue to represent such company only within the
scope of such existing representation without compliance with the
provisions of
IC 27-1-15.6
for a period not to exceed one (1) year
following the effective date of said election, but thereafter such
representation shall be subject to compliance with
IC 27-1-15.6.
Such
election provided for in this section shall become effective upon the
date of issuance of the new certificate of authority pursuant to
IC 27-1-11-7.
Sec. 19. No person, including an insurer, agent, insurance producer,
or affiliate of an insurer, shall make, publish, disseminate, circulate, or
place before the public, or cause, directly or indirectly, to be made,
published, disseminated, circulated or placed before the public, in any
newspaper, magazine or other publication, or in the form of a notice,
circular, pamphlet, letter or poster, or over any radio station or
television station, or in any other way, any advertisement,
announcement or statement which uses the existence of the insurance
guaranty association of this state for the purpose of sales, solicitation,
or inducement to purchase any form of insurance covered by the
Indiana insurance guaranty association law. Provided, however, this
section does not apply to Indiana insurance guaranty association or to
any other entity which does not sell or solicit insurance.
or as an officer, director, or employee of a corporation in this
state, unless the RM person, firm, association, or corporation
is a licensed producer or a reinsurance intermediary in this
state.
(3) in another state for a nondomestic insurer, unless the RM is:
(A) a licensed producer in Indiana or another state having a
law substantially similar to this chapter; or
(B) the person is licensed in this state as a nonresident
reinsurance intermediary.
represents in the capacity of RB reinsurance intermediary-broker
shall only be entered into pursuant to a written authorization,
specifying the responsibilities of each party. The authorization shall, at
a minimum, contain provisions stating the following:
(1) The insurer may terminate the RB's reinsurance
intermediary-broker's authority at any time.
(2) The RB reinsurance intermediary-broker will:
(A) render accounts to the insurer accurately detailing all
material transactions, including information necessary to
support all commissions, charges, and other fees received by
or owing to the RB; reinsurance intermediary-broker; and
(B) remit all funds due to the insurer within thirty (30) days of
receipt.
(3) All funds collected for the insurer's account will be held by the
RB reinsurance intermediary-broker in a fiduciary capacity in
a bank which is a qualified United States financial institution.
(4) The RB reinsurance intermediary-broker will comply with
section 19 of this chapter.
(5) The RB reinsurance intermediary-broker will comply with
the written standards established by the insurer for the cession or
retrocession of all risks.
(6) The RB reinsurance intermediary-broker will disclose to
the insurer any relationship with any reinsurer to which business
will be ceded or retroceded.
and may suspend the authority of the RM reinsurance
intermediary-manager to assume or cede business during the
pendency of any dispute regarding the cause for termination.
(2) The RM reinsurance intermediary-manager will:
(A) render accounts to the reinsurer accurately detailing all
material transactions, including information necessary to
support all commissions, charges, and other fees received by
or owing to the RM; reinsurance intermediary-manager;
and
(B) remit all funds due under the contract to the reinsurer on
not less than a monthly basis.
(3) All funds collected for the reinsurer's account will be held by
the RM reinsurance intermediary-manager in a fiduciary
capacity in a bank which is a qualified United States financial
institution. The RM reinsurance intermediary-manager may
retain no more than three (3) months estimated claims payments
and allocated loss adjustment expenses. The RM reinsurance
intermediary-manager shall maintain a separate bank account
for each reinsurer that it represents.
(4) For at least ten (10) years after expiration of each contract of
reinsurance transacted by the RM, reinsurance
intermediary-manager, the RM reinsurance
intermediary-manager will keep a complete record for each
transactions transaction showing the following:
(A) The type of contract, limits, underwriting restrictions,
classes or risks, and territory.
(B) Period of coverage, including effective and expiration
dates, cancellation provisions and notice required of
cancellation, and disposition of outstanding reserves on
covered risks.
(C) Reporting and settlement requirements of balances.
(D) Rate used to compute the reinsurance premium.
(E) Names and addresses of reinsurers.
(F) Rates of all reinsurance commissions, including the
commissions on any retrocessions handled by the RM.
reinsurance intermediary-manager.
(G) Related correspondence and memoranda.
(H) Proof of placement.
(I) Details regarding retrocessions handled by the RM,
reinsurance intermediary-manager, as permitted by section
23(d) of this chapter, including the identity of retrocessionaires
and percentage of each contract assumed or ceded.
reasonable access to and the right to copy the files on a timely
basis.
(D) Any settlement authority granted to the RM reinsurance
intermediary-manager may be terminated for cause upon the
reinsurer's written notice to the RM reinsurance
intermediary-manager or upon the termination of the
contract. The reinsurer may suspend the settlement authority
during the pendency of the dispute regarding the cause of
termination.
(10) If the contract provides for a sharing of interim profits by the
RM, reinsurance intermediary-manager, that those interim
profits will not be paid until one (1) year after the end of each
underwriting period for property business and five (5) years after
the end of each underwriting period for casualty business (or a
later period set by the commissioner for specified lines of
insurance) and not until the adequacy of reserves on remaining
claims has been verified under section 23(c) of this chapter.
(11) The RM reinsurance intermediary-manager will annually
provide the reinsurer with a statement of its financial condition
prepared by an independent certified accountant.
(12) The reinsurer shall periodically (at least semiannually)
conduct an on-site review of the underwriting and claims
processing operations of the RM. reinsurance
intermediary-manager.
(13) The RM reinsurance intermediary-manager will disclose
to the reinsurer any relationship it has with any insurer prior to
ceding or assuming any business with that insurer pursuant to the
contract.
(14) The acts of the RM reinsurance intermediary-manager
shall be considered to be the acts of the reinsurer on whose behalf
the RM reinsurance intermediary-manager is acting.
Indiana courts with respect to activities conducted under the
license; and
(2) designate the commissioner as the reinsurance
intermediary's agent for service of process.
(b) A licensed reinsurance intermediary shall provide to the
commissioner the name and address of a designated contact
resident of Indiana to whom:
(1) a notice or an order of the commissioner; or
(2) process affecting the reinsurance intermediary;
may be forwarded.
(c) A licensed reinsurance intermediary shall promptly notify
the commissioner in writing of a change in the reinsurance
intermediary's designated contact resident of Indiana specified
under subsection (b). A change in the reinsurance intermediary's
designated contact resident of Indiana is not effective until the
change is acknowledged by the commissioner.
duly licensed by the state of Indiana notice of intent not to renew shall
be mailed or delivered to such agent the insurance producer at least
ten (10) days prior to such mailing or delivery to the named insured
unless such notice of intent is or has been waived in writing by such
agent. the insurance producer.
This section shall not apply: (a) if the insurer has manifested its
willingness to renew; nor (b) in case of nonpayment of premium:
Provided, That, notwithstanding the failure of an insurer to comply
with this section, the policy shall terminate on the effective date of any
other insurance policy with respect to any automobile designated in
both policies.
Renewal of a policy shall not constitute a waiver or estoppel with
respect to grounds for cancellation which existed before the effective
date of such renewal.
group. The record kept under this subsection must be open to
examination by the commissioner and must, for each policy and each
kind of insurance provided, include the following information:
(1) The limit of liability.
(2) The time period covered.
(3) The effective date.
(4) The name of the risk retention group that issued the policy.
(5) The gross premium charged.
(6) The amount of return premiums, if any.
broker, then by the purchasing group, and if not by the purchasing
group, then by each of its members.
of this chapter in the case of a purchasing group.
producer licensed in Indiana, the insurer shall deliver or mail notice
of nonrenewal to the agent insurance producer not less than ten (10)
days before the insurer delivers or mails the notice to the named
insured, unless the obligation to notify the agent insurance producer
is waived in writing by the agent. insurance producer.
(c) If an insurer mails or delivers to an insured a renewal notice, bill,
certificate, or policy indicating the insurer's willingness to renew a
policy and the insured does not respond, the insurer is not required to
provide to the insured notice of intention not to renew.
shall be valid until approved by an executive officer of the insurer and
unless such approval be endorsed hereon or attached hereto. No agent
insurance producer has authority to change this policy or to waive any
of its provisions.
(2) A provision as follows: TIME LIMIT ON CERTAIN
DEFENSES: (A) After two (2) years from the date of issue of this
policy no misstatements, except fraudulent misstatements, made by the
applicant in the application for such policy shall be used to void the
policy or to deny a claim for loss incurred or disability (as defined in
the policy) commencing after the expiration of such two (2) year
period.
The foregoing policy provision shall not be so construed as to affect
any legal requirement for avoidance of a policy of denial of a claim
during such initial two (2) year period, nor to limit the application of
subsection (b), (1), (2), (3), (4), and (5) in the event of misstatement
with respect to age or occupation or other insurance.
A policy which the insured has the right to continue in force subject
to its terms by the timely payment of premium:
(1) until at least age fifty (50); or
(2) in the case of a policy issued after forty-four (44) years of age,
for at least five (5) years from its date of issue;
may contain in lieu of the foregoing the following provision (from
which the clause in parentheses may be omitted at the insurer's option)
under the caption "INCONTESTABLE": After this policy has been in
force for a period of two (2) years during the lifetime of the insured
(excluding any period during which the insured is disabled), it shall
become incontestable as to the statements contained in the application.
(B) No claim for loss incurred or disability (as defined in the policy)
commencing after two (2) years from the date of issue of this policy
shall be reduced or denied on the ground that a disease or physical
condition, not excluded from coverage by name or specific description
effective on the date of loss, had existed prior to the effective date of
coverage of this policy.
(3) A provision as follows: GRACE PERIOD: A grace period of
(insert a number not less than "7" for weekly premium policies, "10"
for monthly premium policies and "31" for all other policies) days will
be granted for the payment of each premium falling due after the first
premium, during which grace period the policy shall continue in force.
A policy in which the insurer reserves the right to refuse renewal
shall have, at the beginning of the above provision: "Unless not less
than thirty (30) days prior to the premium due date the insurer has
delivered to the insured or has mailed to the insured's last address as
shown by the records of the insurer written notice of its intention not
to renew this policy beyond the period for which the premium has been
accepted."
Each policy in which the insurer reserves the right to refuse renewal
on an individual basis shall provide, in substance, in a provision of the
policy, in an endorsement on the policy, or in a rider attached to the
policy, that subject to the right to terminate the policy upon
non-payment of premium when due, such right to refuse renewal shall
not be exercised before the renewal date occurring on, or after and
nearest, each anniversary, or in the case of lapse and reinstatement at
the renewal date occurring on, or after and nearest, each anniversary of
the last reinstatement, and that any refusal or renewal shall be without
prejudice to any claim originating while the policy is in force. The
preceding sentence shall not apply to accident insurance only policies.
(4) A provision as follows: REINSTATEMENT: If any renewal
premium is not paid within the time granted the insured for payment,
a subsequent acceptance of premium by the insurer or by any agent
authorized by the insurer to accept such premium, without requiring in
connection therewith an application for reinstatement, shall reinstate
the policy. Provided, that if the insurer or such agent requires an
application for reinstatement and issues a conditional receipt for the
premium tendered, the policy will be reinstated upon approval of such
application by the insurer or, lacking such approval, upon the forty-fifth
day following the date of such conditional receipt unless the insurer has
previously notified the insured in writing of its disapproval of such
application. The reinstated policy shall cover only loss resulting from
such accidental injury as may be sustained after the date of
reinstatement and loss due to such sickness as may begin more than ten
(10) days after such date. In all other respects the insured and insurer
shall have the same rights as they had under the policy immediately
before the due date of the defaulted premium, subject to any provisions
endorsed hereon or attached hereto in connection with the
reinstatement. Any premium accepted in connection with a
reinstatement shall be applied to a period for which premium has not
been previously paid, but not to any period more than sixty (60) days
prior to the date of reinstatement.
The last sentence of the above provision may be omitted from any
policy which the insured has the right to continue in force subject to its
terms by the timely payment of premiums:
(1) until at least fifty (50) years of age; or
(2) in the case of a policy issued after forty-four (44) years of age,
for at least five (5) years from its date of issue.
than one (1) year from the time proof is otherwise required.
(8) A provision as follows: TIME OF PAYMENT OF CLAIMS:
Indemnities payable under this policy for any loss other than loss for
which this policy provides any periodic payment will be paid:
(1) immediately upon receipt of due written proof of such loss; or
(2) in accordance with
IC 27-8-5.7
;
whichever is more favorable to the policyholder. Subject to due written
proof of loss, all accrued indemnities for loss for which this policy
provides periodic payment will be paid _______ (insert period for
payment which must not be less frequently than monthly) and any
balance remaining unpaid upon the termination of liability will be paid
immediately upon receipt of due written proof. This provision must
reflect compliance with
IC 27-8-5.7.
(9) A provision as follows: PAYMENT OF CLAIMS: Indemnity for
loss of life will be payable in accordance with the beneficiary
designation and the provisions respecting such payment which may be
prescribed herein and effective at the time of payment. If no such
designation or provision is then effective, such indemnity shall be
payable to the estate of the insured. Any other accrued indemnities
unpaid at the insured's death may, at the option of the insurer, be paid
either to such beneficiary or to such estate. All other indemnities will
be payable to the insured.
The following provisions, or either of them, may be included with
the foregoing provision at the option of the insurer:
If any indemnity of this policy shall be payable to the estate of the
insured, or to an insured or beneficiary who is a minor or otherwise not
competent to give a valid release, the insurer may pay such indemnity,
up to an amount not exceeding $ _______ (insert an amount which
shall not exceed $1,000), to any relative by blood or connection by
marriage of the insured or beneficiary who is deemed by the insurer to
be equitably entitled thereto. Any payment made by the insurer in good
faith pursuant to this provision shall fully discharge the insurer to the
extent of such payment.
Subject to any written direction of the insured in the application or
otherwise all or a portion of any indemnities provided by this policy on
account of hospital, nursing, medical, or surgical services may, at the
insurer's option and unless the insured requests otherwise in writing not
later than the time of filing proofs of such loss, be paid directly to the
hospital or person rendering such services; but it is not required that the
service be rendered by a particular hospital or person.
For the purposes of this section a "minor" is a person under the age
of eighteen (18) years. A person eighteen (18) years of age or over is
competent, insofar as the person's age is concerned, to sign a valid
release.
(10) A provision as follows: PHYSICAL EXAMINATIONS AND
AUTOPSY: The insurer at its own expense shall have the right and
opportunity to examine the person of the insured when and as often as
it may reasonably require during the pendency of a claim hereunder
and to make an autopsy in case of death where it is not forbidden by
law.
(11) A provision as follows: LEGAL ACTIONS: No action at law
or in equity shall be brought to recover on this policy prior to the
expiration of sixty (60) days after written proof of loss has been
furnished in accordance with the requirements of this policy. No such
action shall be brought after the expiration of three (3) years after the
time written proof of loss is required to be furnished.
(12) A provision as follows: CHANGE OF BENEFICIARY: Unless
the insured makes an irrevocable designation of beneficiary, the right
to change of beneficiary is reserved to the insured and the consent of
the beneficiary or beneficiaries shall not be requisite to surrender or
assignment of this policy or to any change of beneficiary or
beneficiaries, or to any other changes in this policy.
The first clause of this provision, relating to the irrevocable
designation of beneficiary, may be omitted at the insurer's option.
(13) A provision as follows: GUARANTEED RENEWABILITY:
In compliance with the federal Health Insurance Portability and
Accountability Act of 1996 (P.L.104-191), renewability is guaranteed.
(b) Except as provided in subsection (c), no policy delivered or
issued for delivery to any person in Indiana shall contain provisions
respecting the matters set forth below unless the provisions are in the
words in which the provisions appear in this section. However, the
insurer may use, instead of any provision, a corresponding provision of
different wording approved by the commissioner which is not less
favorable in any respect to the insured or the beneficiary. Any
substitute provision contained in the policy shall be preceded
individually by the appropriate caption appearing in this subsection or,
at the option of the insurer, by appropriate individual or group captions
or subcaptions as the commissioner may approve.
(1) A provision as follows: CHANGE OF OCCUPATION: If the
insured be injured or contract sickness after having changed the
insured's occupation to one classified by the insurer as more hazardous
than that stated in this policy or while doing for compensation anything
pertaining to an occupation so classified, the insurer will pay only such
portion of the indemnities provided in this policy as the premium paid
would have purchased at the rates and within the limits fixed by the
insurer for such more hazardous occupation. If the insured changes the
insured's occupation to one classified by the insurer as less hazardous
than that stated in this policy, the insurer, upon receipt of proof of such
change of occupation, will reduce the premium rate accordingly, and
will return the excess pro rata unearned premium from the date of
change of occupation or from the policy anniversary date immediately
preceding receipt of such proof, whichever is the more recent. In
applying this provision, the classification of occupational risk and the
premium rates shall be such as have been last filed by the insurer prior
to the occurrence of the loss for which the insurer is liable or prior to
date of proof of change in occupation with the state official having
supervision of insurance in the state where the insured resided at the
time this policy was issued; but if such filing was not required, then the
classification of occupational risk and the premium rates shall be those
last made effective by the insurer in such state prior to the occurrence
of the loss or prior to the date of proof of change in occupation.
(2) A provision as follows: MISSTATEMENT OF AGE: If the age
of the insured has been misstated, all amounts payable under this policy
shall be such as the premium paid would have purchased at the correct
age.
(3) A provision as follows: OTHER INSURANCE IN THIS
INSURER: If an accident or sickness or accident and sickness policy
or policies previously issued by the insurer to the insured are in force
concurrently herewith, making the aggregate indemnity for _______
(insert type of coverage or coverages) in excess of $ _______ (insert
maximum limit of indemnity or indemnities) the excess insurance shall
be void and all premiums paid for such excess shall be returned to the
insured or to the insured's estate. Or, instead of that provision:
Insurance effective at any one (1) time on the insured under a like
policy or policies, in this insurer is limited to the one (1) such policy
elected by the insured, the insured's beneficiary or the insured's estate,
as the case may be, and the insurer will return all premiums paid for all
other such policies.
(4) A provision as follows: INSURANCE WITH OTHER
INSURER: If there is other valid coverage, not with this insurer,
providing benefits for the same loss on a provision of service basis or
on an expense incurred basis and of which this insurer has not been
given written notice prior to the occurrence or commencement of loss,
the only liability under any expense incurred coverage of this policy
shall be for such proportion of the loss as the amount which would
otherwise have been payable hereunder plus the total of the like
amounts under all such other valid coverages for the same loss of
which this insurer had notice bears to the total like amounts under all
valid coverages for such loss, and for the return of such portion of the
premiums paid as shall exceed the pro-rata portion of the amount so
determined. For the purpose of applying this provision when other
coverage is on a provision of service basis, the "like amount" of such
other coverage shall be taken as the amount which the services
rendered would have cost in the absence of such coverage.
If the foregoing policy provision is included in a policy which also
contains the next following policy provision there shall be added to the
caption of the foregoing provision the phrase "EXPENSE INCURRED
BENEFITS". The insurer may, at its option, include in this provision
a definition of "other valid coverage," approved as to form by the
commissioner, which definition shall be limited in subject matter to
coverage provided by organizations subject to regulation by insurance
law or by insurance authorities of this or any other state of the United
States or any province of Canada, and by hospital or medical service
organizations, and to any other coverage the inclusion of which may be
approved by the commissioner. In the absence of such definition such
term shall not include group insurance, automobile medical payments
insurance, or coverage provided by hospital or medical service
organizations or by union welfare plans or employer or employee
benefit organizations. For the purpose of applying the foregoing policy
provision with respect to any insured, any amount of benefit provided
for such insured pursuant to any compulsory benefit statute (including
any worker's compensation or employer's liability statute) whether
provided by a governmental agency or otherwise shall in all cases be
deemed to be "other valid coverage" of which the insurer has had
notice. In applying the foregoing policy provision no third party
liability coverage shall be included as "other valid coverage".
(5) A provision as follows: INSURANCE WITH OTHER
INSURERS: If there is other valid coverage, not with this insurer,
providing benefits for the same loss on other than an expense incurred
basis and of which this insurer has not been given written notice prior
to the occurrence or commencement of loss, the only liability for such
benefits under this policy shall be for such proportion of the
indemnities otherwise provided hereunder for such loss as the like
indemnities of which the insurer had notice (including the indemnities
under this policy) bear to the total amount of all like indemnities for
such loss, and for the return of such portion of the premium paid as
shall exceed the pro-rata portion for the indemnities thus determined.
If the foregoing policy provision is included in a policy which also
contains the next preceding policy provision, there shall be added to the
caption of the foregoing provision the phrase "-OTHER BENEFITS."
The insurer may, at its option, include in this provision a definition of
"other valid coverage," approved as to form by the commissioner,
which definition shall be limited in subject matter to coverage provided
by organizations subject to regulation by insurance law or by insurance
authorities of this or any other state of the United States or any
province of Canada, and to any other coverage to the inclusion of
which may be approved by the commissioner. In the absence of such
definition such term shall not include group insurance or benefits
provided by union welfare plans or by employer or employee benefit
organizations. For the purpose of applying the foregoing policy
provision with respect to any insured, any amount of benefit provided
for such insured pursuant to any compulsory benefit statute (including
any worker's compensation or employer's liability statute) whether
provided by a governmental agency or otherwise shall in all cases be
deemed to be "other valid coverage" of which the insurer has had
notice. In applying the foregoing policy provision no third party
liability coverage shall be included as "other valid coverage".
(6) A provision as follows: RELATION OF EARNINGS TO
INSURANCE: If the total monthly amount of loss of time benefits
promised for the same loss under all valid loss of time coverage upon
the insured, whether payable on a weekly or monthly basis, shall
exceed the monthly earnings of the insured at the time disability
commenced or the insured's average monthly earnings for the period of
two (2) years immediately preceding a disability for which claim is
made, whichever is the greater, the insurer will be liable only for such
proportionate amount of such benefits under this policy as the amount
of such monthly earnings or such average monthly earnings of the
insured bears to the total amount of monthly benefits for the same loss
under all such coverage upon the insured at the time such disability
commences and for the return of such part of the premiums paid during
such two (2) years as shall exceed the pro rata amount of the premiums
for the benefits actually paid; but this shall not operate to reduce the
total monthly amount of benefits payable under all such coverage upon
the insured below the sum of two hundred dollars ($200) or the sum of
the monthly benefits specified in such coverages, whichever is the
lesser, nor shall it operate to reduce benefits other than those payable
for loss of time.
The foregoing policy provision may be inserted only in a policy
which the insured has the right to continue in force subject to its terms
by the timely payment of premiums:
accordance with such subsections, shall be printed in the consecutive
order of the provisions in such subsections or, at the option of the
insurer, any such provision may appear as a unit in any part of the
policy, with other provisions to which it may be logically related,
provided the resulting policy shall not be in whole or in part
unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a
person to whom the policy is offered, delivered, or issued.
(e) "Insured", as used in this chapter, shall not be construed as
preventing a person other than the insured with a proper insurable
interest from making application for and owning a policy covering the
insured or from being entitled under such a policy to any indemnities,
benefits, and rights provided therein.
(f)(1) Any policy of a foreign or alien insurer, when delivered or
issued for delivery to any person in this state, may contain any
provision which is not less favorable to the insured or the beneficiary
than is provided in this chapter and which is prescribed or required by
the law of the state under which the insurer is organized.
(f)(2) Any policy of a domestic insurer may, when issued for
delivery in any other state or country, contain any provision permitted
or required by the laws of such other state or country.
(g) The commissioner may make reasonable rules under
IC 4-22-2
concerning the procedure for the filing or submission of policies
subject to this chapter as are necessary, proper, or advisable to the
administration of this chapter. This provision shall not abridge any
other authority granted the commissioner by law.
indirectly, an announcement or statement that uses the existence of the
association for the purpose of sales, solicitation, or inducement to
purchase any form of insurance covered by this chapter. This section
does not apply to the association or any other entity that does not sell
or solicit insurance.
reasonable, and equitable administration of the association and
provides for the sharing of association losses on an equitable,
proportionate basis among the member carriers, health maintenance
organizations, limited service health maintenance organizations, and
self-insurers. If the association fails to submit a suitable plan of
operation within one hundred eighty (180) days after the appointment
of the board of directors, or at any time thereafter the association fails
to submit suitable amendments to the plan, the commissioner shall
adopt rules under
IC 4-22-2
necessary or advisable to implement this
section. These rules are effective until modified by the commissioner
or superseded by a plan submitted by the association and approved by
the commissioner. The plan of operation must:
(1) establish procedures for the handling and accounting of assets
and money of the association;
(2) establish the amount and method of reimbursing members of
the board;
(3) establish regular times and places for meetings of the board of
directors;
(4) establish procedures for records to be kept of all financial
transactions, and for the annual fiscal reporting to the
commissioner;
(5) establish procedures whereby selections for the board of
directors will be made and submitted to the commissioner for
approval;
(6) contain additional provisions necessary or proper for the
execution of the powers and duties of the association; and
(7) establish procedures for the periodic advertising of the general
availability of the health insurance coverages from the
association.
(d) The plan of operation may provide that any of the powers and
duties of the association be delegated to a person who will perform
functions similar to those of this association. A delegation under this
section takes effect only with the approval of both the board of
directors and the commissioner. The commissioner may not approve a
delegation unless the protections afforded to the insured are
substantially equivalent to or greater than those provided under this
chapter.
(e) The association has the general powers and authority enumerated
by this subsection in accordance with the plan of operation approved
by the commissioner under subsection (c). The association has the
general powers and authority granted under the laws of Indiana to
carriers licensed to transact the kinds of health care services or health
insurance described in section 1 of this chapter and also has the
specific authority to do the following:
(1) Enter into contracts as are necessary or proper to carry out this
chapter, subject to the approval of the commissioner.
(2) Sue or be sued, including taking any legal actions necessary
or proper for recovery of any assessments for, on behalf of, or
against participating carriers.
(3) Take legal action necessary to avoid the payment of improper
claims against the association or the coverage provided by or
through the association.
(4) Establish a medical review committee to determine the
reasonably appropriate level and extent of health care services in
each instance.
(5) Establish appropriate rates, scales of rates, rate classifications
and rating adjustments, such rates not to be unreasonable in
relation to the coverage provided and the reasonable operational
expenses of the association.
(6) Pool risks among members.
(7) Issue policies of insurance on an indemnity or provision of
service basis providing the coverage required by this chapter.
(8) Administer separate pools, separate accounts, or other plans
or arrangements considered appropriate for separate members or
groups of members.
(9) Operate and administer any combination of plans, pools, or
other mechanisms considered appropriate to best accomplish the
fair and equitable operation of the association.
(10) Appoint from among members appropriate legal, actuarial,
and other committees as necessary to provide technical assistance
in the operation of the association, policy and other contract
design, and any other function within the authority of the
association.
(11) Hire an independent consultant.
(12) Develop a method of advising applicants of the availability
of other coverages outside the association and may promulgate a
list of health conditions the existence of which would deem an
applicant eligible without demonstrating a rejection of coverage
by one (1) carrier.
(13) Provide for the use of managed care plans for insureds,
including the use of:
(A) health maintenance organizations; and
(B) preferred provider plans.
(14) Solicit bids directly from providers for coverage under this
chapter.
(f) Rates for coverages issued by the association may not be
unreasonable in relation to the benefits provided, the risk experience,
and the reasonable expenses of providing the coverage. Separate scales
of premium rates based on age apply for individual risks. Premium
rates must take into consideration the extra morbidity and
administration expenses, if any, for risks insured in the association. The
rates for a given classification may not be more than one hundred fifty
percent (150%) of the average premium rate for that class charged by
the five (5) carriers with the largest premium volume in the state during
the preceding calendar year. In determining the average rate of the five
(5) largest carriers, the rates charged by the carriers shall be actuarially
adjusted to determine the rate that would have been charged for
benefits identical to those issued by the association. All rates adopted
by the association must be submitted to the commissioner for approval.
(g) Following the close of the association's fiscal year, the
association shall determine the net premiums, the expenses of
administration, and the incurred losses for the year. Any net loss shall
be assessed by the association to all members in proportion to their
respective shares of total health insurance premiums, excluding
premiums for Medicaid contracts with the state of Indiana, received in
Indiana during the calendar year (or with paid losses in the year)
coinciding with or ending during the fiscal year of the association or
any other equitable basis as may be provided in the plan of operation.
For self-insurers, health maintenance organizations, and limited service
health maintenance organizations that are members of the association,
the proportionate share of losses must be determined through the
application of an equitable formula based upon claims paid, excluding
claims for Medicaid contracts with the state of Indiana, or the value of
services provided. In sharing losses, the association may abate or defer
in any part the assessment of a member, if, in the opinion of the board,
payment of the assessment would endanger the ability of the member
to fulfill its contractual obligations. The association may also provide
for interim assessments against members of the association if necessary
to assure the financial capability of the association to meet the incurred
or estimated claims expenses or operating expenses of the association
until the association's next fiscal year is completed. Net gains, if any,
must be held at interest to offset future losses or allocated to reduce
future premiums. Assessments must be determined by the board
members specified in subsection (b)(1), subject to final approval by the
commissioner.
(h) The association shall conduct periodic audits to assure the
general accuracy of the financial data submitted to the association, and
the association shall have an annual audit of its operations by an
independent certified public accountant.
(i) The association is subject to examination by the department of
insurance under
IC 27-1-3.1.
The board of directors shall submit, not
later than March 30 of each year, a financial report for the preceding
calendar year in a form approved by the commissioner.
(j) All policy forms issued by the association must conform in
substance to prototype forms developed by the association, must in all
other respects conform to the requirements of this chapter, and must be
filed with and approved by the commissioner before their use.
(k) The association may not issue an association policy to any
individual who, on the effective date of the coverage applied for, does
not meet the eligibility requirements of section 5.1 of this chapter.
(l) The association shall pay an agent's insurance producer's
referral fee of twenty-five dollars ($25) to each insurance agent
producer who refers an applicant to the association if that applicant is
accepted.
(m) The association and the premium collected by the association
shall be exempt from the premium tax, the gross income tax, the
adjusted gross income tax, supplemental corporate net income, or any
combination of these, or similar taxes upon revenues or income that
may be imposed by the state.
(n) Members who after July 1, 1983, during any calendar year, have
paid one (1) or more assessments levied under this chapter may either:
(1) take a credit against premium taxes, gross income taxes,
adjusted gross income taxes, supplemental corporate net income
taxes, or any combination of these, or similar taxes upon revenues
or income of member insurers that may be imposed by the state,
up to the amount of the taxes due for each calendar year in which
the assessments were paid and for succeeding years until the
aggregate of those assessments have been offset by either credits
against those taxes or refunds from the association; or
(2) any member insurer may include in the rates for premiums
charged for insurance policies to which this chapter applies
amounts sufficient to recoup a sum equal to the amounts paid to
the association by the member less any amounts returned to the
member insurer by the association, and the rates shall not be
deemed excessive by virtue of including an amount reasonably
calculated to recoup assessments paid by the member.
(o) The association shall provide for the option of monthly
collection of premiums.
policy of the right to change the premium.
(8) A specific statement of the provisions for continuation or
conversion of group coverage.
FOLLOWS [EFFECTIVE JANUARY 1, 2002 (RETROACTIVE)]:
Sec. 19. (a) In addition to any other sanction provided under this
article, the commissioner may impose a civil penalty against an insurer
who has violated this chapter or rules adopted under this chapter. A
penalty imposed under this section must be the greater of:
(1) three (3) times the amount of the commissions paid for each
policy involved in the violation; or
(2) ten thousand dollars ($10,000).
(b) In addition to any other sanction provided under this title, the
commissioner may impose a penalty against an insurance agent
producer who has violated this chapter or rules adopted under this
chapter. The penalty must be the greater of:
(1) up to three (3) times the amount of the commissions paid for
each policy involved in the violation; or
(2) twenty-five hundred dollars ($2,500).
an application for a policy.
chapter, "claim review consultant" means a person who:
(1) makes a recommendation or provides consultation to:
(A) an entity engaged in performing medical claims review; or
(B) an insurance company, a health maintenance organization,
or another benefit program providing payment,
reimbursement, or indemnification for health care costs to an
enrollee;
concerning the appropriateness of a health care service or the
amount charged for a health care service delivered to an enrollee
in Indiana; and
(2) is not an employee of an entity referred to in subdivision
(1)(A) or (1)(B).
(b) Making a recommendation or providing consultation concerning
a health care service does not render a person a claim review consultant
under this section if the recommendation or consultation concerns:
(1) coverage provided; or
(2) medical services rendered;
under IC 22.
(c) The term "claim review consultant" does not include the
following:
(1) An insurance company authorized under IC 27 to do business
in Indiana.
(2) An entity acting on behalf of the federal or state government.
However, an agent described in this subdivision who performs
medical claims review for a person other than the federal or state
government is a claim review agent who is subject to the
requirements of this chapter.
(3) A health maintenance organization or limited service health
maintenance organization that holds a certificate of authority to
operate under IC 27-13.
(4) An insurance administrator who holds a certificate of
registration issued that is licensed under
IC 27-1-25.
(5) An individual qualified and acting as an expert witness under
the Indiana Rules of Trial Procedure.
(6) A person who engages in the prospective, concurrent, or
retrospective utilization review of health care services.
(7) A person who engages in the identification of alternative,
optional medical care that:
(A) requires the approval of the enrollee or covered individual;
and
(B) does not affect coverage or benefits if rejected by the
enrollee or covered individual.
insurer or an alien insurer domiciled in Indiana if the person served is:
(1) obligated to the insurer in any way as an incident to any
agency or brokerage arrangement that may exist or has existed
between the insurer and the agent insurance producer or broker,
in any action on or incident to the obligation;
(2) a reinsurer who:
(A) has at any time written a policy of reinsurance for an
insurer against which a rehabilitation or liquidation order is in
effect when the action is commenced; or
(B) is an agent insurance producer or broker of, or for, the
reinsurer in any action on or incident to the reinsurance
contract; or
(3) or has been an officer, manager, trustee, organizer, promoter,
or person in a position of comparable authority or influence in an
insurer against which a rehabilitation or liquidation order is in
effect when the action is commenced in any action resulting from
such a relationship with the insurer.
(d) If it appears to a receiver appointed in a proceeding under this
article that there has been criminal or tortious conduct, breach of any
contractual or fiduciary obligation, or other unlawful conduct
detrimental to the insurer by any director, officer, manager, agent,
insurance producer, broker, employee, or other person or entity, the
receiver may pursue all appropriate legal remedies on behalf of the
insurer.
(e) If the court on motion of any party finds that any action should
as a matter of substantial justice be tried in a forum outside Indiana, the
court may enter an order to stay further proceedings on the action in
Indiana.
(f) All action authorized by this section must be brought in the
Marion County circuit court.
or otherwise dealing with the business and property of the insurer.
(5) Hold hearings, subpoena witnesses to compel their attendance,
administer oaths, examine any person under oath, and compel any
person to subscribe to his testimony after it has been correctly
reduced to writing, and in connection with hearings and the
examination of witnesses require the production of any books,
papers, records, or other documents which he deems relevant to
the inquiry.
(6) Collect all debts and moneys due and claims belonging to the
insurer, wherever located, and for this purpose:
(A) institute timely action in other jurisdictions, in order to
forestall garnishment and attachment proceedings against
those debts;
(B) do other acts necessary or expedient to collect, conserve,
or protect its assets or property, including the power to sell,
compound, compromise, or assign debts for purposes of
collection upon terms and conditions as he considers best; and
(C) pursue any creditor's remedies available to enforce his
claims.
(7) Conduct public and private sales of the property of the insurer.
(8) Use assets of the estate of an insurer under a liquidation order
to transfer policy obligations to a solvent assuming insurer, if the
transfer can be arranged without prejudice to applicable priorities
under section 40 of this chapter.
(9) Acquire, hypothecate, encumber, lease, improve, sell, transfer,
abandon, or otherwise dispose of or deal with, any property of the
insurer at its market value or upon such terms and conditions as
are fair and reasonable.
(10) Borrow money on the security of the insurer's assets or
without security and execute and deliver all documents necessary
to that transaction for the purpose of facilitating the liquidation.
(11) Enter into contracts that are necessary to carry out the order
to liquidate, and affirm or disavow any contracts to which the
insurer is a party.
(12) Continue to prosecute and to institute in the name of the
insurer, or in his own name, all suits and other legal proceedings,
in Indiana or elsewhere, and abandon the prosecution of claims he
considers unprofitable to pursue further.
(13) Prosecute any action that may exist in behalf of the creditors,
members, policyholders, or shareholders of the insurer against any
director or officer of the insurer, or any other person.
(14) Remove all records and property of the insurer to the offices
of the commissioner or to some other place as may be convenient
for the purposes of efficient and orderly execution of the
liquidation.
(15) Deposit in one (1) or more banks in Indiana sums required
for meeting current administration expenses and dividend
distributions.
(16) Invest all sums not currently needed, unless the court orders
otherwise.
(17) File any necessary documents for record in the office of any
recorder of deeds or record office in Indiana or elsewhere where
property of the insurer is located.
(18) Assert all defenses available to the insurer as against third
persons, including statutes of limitation, statutes of frauds, and the
defense of usury.
(19) Exercise and enforce all the rights, remedies, and powers of
any creditor, shareholder, policyholder, or member, including any
power to avoid any transfer or lien that may be given by the
general law and that is not included in sections 14 through 16 of
this chapter.
(20) Intervene in any proceeding wherever instituted that might
lead to the appointment of a receiver or trustee, and act as the
receiver or trustee whenever the appointment is offered.
(21) Enter into agreements with any receiver or commissioner of
any other state relating to the rehabilitation, liquidation,
conservation, or dissolution of an insurer doing business in both
states.
(22) Exercise all powers conferred upon receivers by the laws of
Indiana not inconsistent with this article.
have claims against the insurer, including all policyholders, at
their last known address as indicated by the records of the insurer;
(5) first-class mail to the secretary of state's office; and
(6) publication in a newspaper of general circulation in the county
in which the insurer has its principal place of business and in all
other locations the liquidator considers appropriate.
(b) Notice to potential claimants under subsection (a) must require
claimants to file with the liquidator their claims, together with proper
proof of those claims under section 34 of this chapter, before a date the
liquidator specifies in the notice. The liquidator need not require
persons claiming cash surrender values or other investment values in
life insurance and annuities to file a claim. All claimants must keep the
liquidator informed of any changes of address.
(c) If notice is given in accordance with this section, the distribution
of assets of the insurer under this chapter shall be conclusive with
respect to all claimants, whether or not they received notice.
agents insurance producers under contract to him. the general agent.
Each agent insurance producer obligated to give notice under this
section shall file a report of compliance with the liquidator.
(f) After a hearing under
IC 4-21.5-3
, an agent insurance producer
failing to give notice or file a report of compliance as required by
subsection (e) may be subject to payment of a penalty of not more than
one thousand dollars ($1,000) and may have his license suspended.
(g) The liquidator may waive the duties imposed by this section if
he determines that other notice to the policyholders of the insurer under
liquidation is adequate.
engaged in the activities of a bail agent.
(c) A firm, a partnership, an association, a limited liability company,
or a corporation may not be licensed.
(d) The applicant must apply in writing, on forms prepared and
supplied by the commissioner, and the commissioner may propound
any reasonable interrogatories to an applicant for a license under this
article or on any renewal of a license relating to the applicant's
qualifications, residence, prospective place of business, and any other
matters which, in the opinion of the commissioner, are deemed
necessary or expedient in order to protect the public and ascertain the
qualifications of the applicant. The commissioner may also conduct any
reasonable inquiry or investigation the commissioner sees fit, relative
to the determination of the applicant's fitness to be licensed or to
continue to be licensed.
(e) The failure of the applicant to secure approval of the
commissioner shall not preclude the applicant from applying as many
times as the applicant desires. However, an applicant's application may
not be considered by the commissioner within one (1) year subsequent
to the date upon which the commissioner denied the applicant's last
application.
engaged for at least one (1) year of the last five (5) years.
(b) The application must affirmatively show that the applicant has
been a bona fide resident of the state for one (1) year immediately
preceding the date of application. However, the commissioner may
waive this requirement.
JANUARY 1, 2002 (RETROACTIVE)]: Sec. 18. (a) Except as
provided in subsection (c), a limited service health maintenance
organization shall maintain in force a fidelity bond in its own name on
its officers and employees:
(1) in an amount not less than fifty thousand dollars ($50,000); or
(2) in any other amount prescribed by the commissioner.
(b) The fidelity bond required by this section must be issued by an
insurance company not affiliated in any way with the limited service
health maintenance organization, that is licensed to do business in
Indiana. However, if a fidelity bond is not available from an insurance
company that holds a certificate of authority in Indiana, a limited
service health maintenance organization may satisfy the requirement
of this section by maintaining a fidelity bond procured by a surplus
lines insurance agent producer not affiliated in any way with the
limited service health maintenance organization who holds a license
issued under
IC 27-1-15.8.
(c) Instead of maintaining a fidelity bond under subsection (a), a
limited service health maintenance organization may deposit with the
commissioner:
(1) cash;
(2) certificates of deposit;
(3) United States government obligations acceptable to the
commissioner;
(4) any other securities acceptable to the commissioner of the
types referred to in
IC 27-13-11-1
; or
(5) a combination of the items described in subdivisions (1)
through (4).
A deposit made under this subsection is in addition to any other
required deposit, and must also be maintained in joint custody with the
commissioner in the amount and subject to the same conditions
required for a fidelity bond under this section.
contract from the bank or trust company or an affiliate (as defined in
IC 28-2-13-3
) of the bank or trust company.
(d) This section does not prohibit a bank or trust company from
requiring that a person, as a condition to a transaction, obtain a life
insurance policy from an insurance company acceptable to the bank or
trust company.
sale confirmation notice that relates to a life insurance policy or an
annuity contract sold or offered for sale by a financial institution must
conspicuously disclose the information required by subsection (b).
(f) A financial institution may not:
(1) use information from a purchaser's personal financial
statement for the purpose of selling or soliciting the purchase of
life insurance; or
(2) provide information from a purchaser's personal financial
statement to a third party for the purpose of the third party's sale
or solicitation of the purchase of life insurance;
unless an insurance agent producer of the financial institution obtains
the information directly from the purchaser.
(g) If a financial institution sells or solicits the sale of insurance on
the premises of its principal office or a branch, the financial institution
may sell or solicit the sale of insurance only in a location of the
premises that is:
(1) physically separated and distinct from the banking activities
of the financial institution; and
(2) clearly and conspicuously posted in a manner that easily
indicates to the public that the location is separate and distinct
from the banking activities of the financial institution.
(h) If a financial institution requires a person to obtain an insurance
policy in connection with a non-insurance product or service, the
insurance transaction must be completed on a document separate from
the document or documents used to complete the transaction involving
the non-insurance product or service.
insurance producer for the sale of life insurance other than an annuity
contract.
IC 27-1-2-3
) authorized to do business in Indiana under IC 27-1.
(b) A corporate fiduciary that acts as an agent for the sale of an
annuity contract or a life insurance policy:
(1) is subject to all requirements of IC 27 relating to the sale and
solicitation of insurance, including licensing as an agent
insurance producer under
IC 27-1-15.6
; and
(2) must comply with the disclosure requirements under
IC 28-1-11-2.6.
the mortgagee or mortgage servicer; or
(E) any other documentary evidence of payment to the
mortgagee or mortgage servicer.
(7) A statement indicating that more than sixty (60) days have
elapsed since the date payment in full was sent.
(8) A statement that after the expiration of the sixty (60) day
period in section 9 of this chapter, the title insurance company, its
officers, or its agent sent to the last known address of the
mortgagee or mortgage servicer, at least thirty (30) days before
executing the certificate of release, notice in writing of its
intention to execute and record a certificate of release as required
under this section, with an unexecuted copy of the proposed
certificate of release attached to the written notice.
(9) A statement that neither the title insurance company nor its
officers or agent have received notification in writing of any
reason why the certificate of release should not be executed and
recorded after the expiration of the thirty (30) day notice period
in section 9 of this chapter.
writing, or as a computer generated document, including the following:
(1) An account.
(2) A bill for services.
(3) A bill of lading.
(4) A claim.
(5) A diagnosis.
(6) An estimate of property damages.
(7) A hospital record.
(8) An invoice.
(9) A notice.
(10) A proof of loss.
(11) A receipt for payment.
(12) A physician's records.
(13) A prescription.
(14) A statement.
(15) A test result.
(16) X-rays.
(c) "Coin machine" means a coin box, vending machine, or other
mechanical or electronic device or receptacle designed:
(1) to receive a coin, bill, or token made for that purpose; and
(2) in return for the insertion or deposit of a coin, bill, or token
automatically:
(A) to offer, provide, or assist in providing; or
(B) to permit the acquisition of;
some property.
(d) "Credit card" means an instrument or device (whether known as
a credit card or charge plate, or by any other name) issued by an issuer
for use by or on behalf of the credit card holder in obtaining property.
(e) "Credit card holder" means the person to whom or for whose
benefit the credit card is issued by an issuer.
(f) "Customer" means a person who receives or has contracted for
a utility service.
(g) "Entrusted" means held in a fiduciary capacity or placed in
charge of a person engaged in the business of transporting, storing,
lending on, or otherwise holding property of others.
(h) "Identifying information" means information that identifies an
individual, including an individual's:
(1) name, date of birth, Social Security number, or any
identification number issued by a governmental entity;
(2) unique biometric data, including the individual's fingerprint,
voice print, or retina or iris image;
(3) unique electronic identification number, address, or routing
code;
(4) telecommunication identifying information; or
(5) telecommunication access device, including a card, a plate, a
code, an account number, a personal identification number, an
electronic serial number, a mobile identification number, or other
another telecommunications service or device or means of
account access that may be used to:
(A) obtain money, goods, services, or any other thing of value;
or
(B) initiate a transfer of funds.
(i) "Insurance policy" includes the following:
(1) An insurance policy.
(2) A contract with a health maintenance organization (as defined
in
IC 27-13-1-19
).
(3) An administrator contract A written agreement entered into
under
IC 27-1-25.
(j) "Insurer" has the meaning set forth in
IC 27-1-2-3
(x).
(k) "Manufacturer" means a person who manufactures a recording.
The term does not include a person who manufactures a medium upon
which sounds or visual images can be recorded or stored.
(l) "Make" means to draw, prepare, complete, counterfeit, copy or
otherwise reproduce, or alter any written instrument in whole or in part.
(m) "Metering device" means a mechanism or system used by a
utility to measure or record the quantity of services received by a
customer.
(n) "Public relief or assistance" means any payment made, service
rendered, hospitalization provided, or other benefit extended to a
person by a governmental entity from public funds and includes poor
relief, food stamps, direct relief, unemployment compensation, and any
other form of support or aid.
(o) "Recording" means a tangible medium upon which sounds or
visual images are recorded or stored. The term includes the following:
(1) An original:
(A) phonograph record;
(B) compact disc;
(C) wire;
(D) tape;
(E) audio cassette;
(F) video cassette; or
(G) film.
(2) Any other medium on which sounds or visual images are or
can be recorded or otherwise stored.
a pension proportional to the length of the employee beneficiary's
service.
(j) This subsection does not apply to a county that adopts an
ordinance under section 12.1 of this chapter. For an employee
beneficiary who retires before January 1, 1985, a monthly pension may
not exceed by more than twenty dollars ($20) one-half (1/2) the amount
of the average monthly wage received during the highest paid five (5)
years before retirement. However, in counties where the fiscal body
approves the increases, the maximum monthly pension for an employee
beneficiary who retires after December 31, 1984, may be increased by
no more or no less than two percent (2%) of that average monthly wage
for each year of service over twenty (20) years to a maximum of
seventy-four percent (74%) of that average monthly wage plus twenty
dollars ($20). For the purposes of determining the amount of an
increase in the maximum monthly pension approved by the fiscal body
for an employee beneficiary who retires after December 31, 1984, the
fiscal body may determine that the employee beneficiary's years of
service include the years of service with the sheriff's department that
occurred before the effective date of the pension trust. For an employee
beneficiary who retires after June 30, 1996, the average monthly wage
used to determine the employee beneficiary's pension benefits may not
exceed the monthly minimum salary that a full-time prosecuting
attorney was entitled to be paid by the state at the time the employee
beneficiary retires.
(k) The trust fund may not be commingled with other funds, except
as provided in this chapter, and may be invested only in accordance
with statutes for investment of trust funds, including other investments
that are specifically designated in the trust agreement.
(l) The trustee receives and holds as trustee all money paid to it as
trustee by the department, the employee beneficiaries, or by other
persons for the uses stated in the trust agreement.
(m) The trustee shall engage pension engineers to supervise and
assist in the technical operation of the pension trust in order that there
is no deterioration in the actuarial status of the plan.
(n) Within ninety (90) days after the close of each fiscal year the
trustee, with the aid of the pension engineers, shall prepare and file an
annual report with the department. and the state insurance department.
The report must include the following:
(1) Schedule 1. Receipts and disbursements.
(2) Schedule 2. Assets of the pension trust listing investments by
book value and current market value as of the end of the fiscal
year.