CHAPTER 25. INSURANCE ADMINISTRATORS
IC 27-1-25
Chapter 25. Insurance Administrators
IC 27-1-25-1
Definitions
Sec. 1. As used in this chapter:
(a) "Administrator", except as provided in section 7.5 of thischapter, means a person who directly or indirectly and on behalf ofan insurer underwrites, collects charges or premiums from, or adjustsor settles claims on residents of Indiana in connection with life,annuity, or health coverage offered or provided by an insurer. Theterm "administrator" does not include the following persons:
(1) An employer or a wholly owned direct or indirect subsidiaryof an employer acting on behalf of the employees of:
(A) the employer;
(B) the subsidiary; or
(C) an affiliated corporation of the employer.
(2) A union acting for its members.
(3) An insurer.
(4) An insurance 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 ofinsurance.
(5) A creditor acting for its debtors regarding insurancecovering 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) ofthe Internal Revenue Code and:
(A) the trustees and employees acting pursuant to that trust;or
(B) a custodian and the agents and employees of thecustodian acting pursuant to a custodian account that meetsthe requirements of Section 401(f) of the Internal RevenueCode.
(8) A financial institution that is subject to supervision orexamination by federal or state banking authorities to the extentthat the financial institution collects and remits premiums to aninsurance producer or an authorized insurer in connection witha loan payment.
(9) A credit card issuing company that:
(A) advances for; and
(B) collects from, when a credit card holder authorizes thecollection;
credit card holders of the credit card issuing company,insurance premiums or charges. (10) A person that adjusts or settles claims in the normal courseof the person's practice or employment as an attorney at law andthat does not collect charges or premiums in connection withlife, annuity, or health coverage.
(11) A health maintenance organization that has a certificate ofauthority issued under IC 27-13.
(12) A limited service health maintenance organization that hasa certificate of authority issued under IC 27-13.
(13) A mortgage lender to the extent that the mortgage lendercollects and remits premiums to an insurance producer or anauthorized insurer in connection with a loan payment.
(14) A person that:
(A) is licensed as a managing general agent as requiredunder IC 27-1-33; and
(B) acts exclusively within the scope of activities providedfor under the license referred to in clause (A).
(15) A person that:
(A) directly or indirectly underwrites, collects charges orpremiums from, or adjusts or settles claims on residents ofIndiana in connection with life, annuity, or health coverageprovided by an insurer;
(B) is affiliated with the insurer; and
(C) performs the duties specified in clause (A) onlyaccording to a contract between the person and the insurerfor the direct and assumed life, annuity, or health coverageprovided by the insurer.
(b) "Affiliate" means an entity or a person that:
(1) directly or indirectly through an intermediary controls or iscontrolled 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 commissionerappointed under IC 27-1-1-2.
(e) "Control" means the direct or indirect possession of the powerto direct or cause the direction of the management and policies of aperson, whether:
(1) through ownership of voting securities;
(2) by contract other than a commercial contract for goods ornonmanagement services; or
(3) otherwise;
unless the power is the result of an official position with the personor a corporate office held by the person. Control is presumed to existif a person directly or indirectly owns, controls, holds with the powerto 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 coveredunder 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.
(h) "GAAP" refers to consistently applied United States generallyaccepted accounting principles.
(i) "Governmental plan" has the meaning set forth inIC 27-8-10-1.
(j) "Home state" means the District of Columbia or any state orterritory of the United States in which an administrator isincorporated or maintains the administrator's principal place ofbusiness. If the place in which the administrator is incorporated ormaintains the administrator's principal place of business is notgoverned by a law that is substantially similar to this chapter, theadministrator's home state is another state:
(1) in which the administrator conducts the business of theadministrator; and
(2) that the administrator declares is the administrator's homestate.
(k) "Insurance producer" has the meaning set forth inIC 27-1-15.6-2.
(l) "Insurer" means:
(1) a person who obtains a certificate of authority under:
(A) IC 27-1-3-20;
(B) IC 27-13-3; or
(C) IC 27-13-34; or
(2) an employer that provides life, health, or annuity coveragein Indiana under a governmental plan or a church plan.
(m) "NAIC" refers to the National Association of InsuranceCommissioners.
(n) "Negotiate" has the meaning set forth in IC 27-1-15.6-2.
(o) "Nonresident administrator" means a person that applies foror holds a license under section 12.2 of this chapter.
(p) "Person" has the meaning set forth in IC 27-1-15.6-2.
(q) "Sell" has the meaning set forth in IC 27-1-15.6-2.
(r) "Solicit" has the meaning set forth in IC 27-1-15.6-2.
(s) "Underwrite" refers to the:
(1) acceptance of a group application or an individualapplication for coverage of an individual in accordance with thewritten rules of the insurer; or
(2) planning and coordination of a benefit program provided byan insurer.
(t) "Uniform application" means the current version of the NAICuniform application for third party administrators.
As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.1; P.L.26-1991, SEC.18; P.L.26-1994, SEC.10;P.L.2-1995, SEC.101; P.L.185-1996, SEC.9; P.L.79-1998, SEC.31;P.L.207-1999, SEC.1 and P.L.255-1999, SEC.1; P.L.132-2001,SEC.7; P.L.160-2003, SEC.4; P.L.178-2003, SEC.27; P.L.97-2004,SEC.96.
IC 27-1-25-2
Written agreements Sec. 2. (a) An administrator may act only if there is a writtenagreement between the administrator and an insurer. This agreementmust conform to the requirements of this chapter, which apply to thefunctions performed by the administrator.
(b) An agreement between an administrator and an insurer mustbe retained by both parties as part of their official records for aperiod of not less than five (5) years after the termination of theagreement.
(c) When a policy is issued to a trustee, a copy of the trustagreement and all amendments to it must be:
(1) furnished by the administrator to the insurer with which theadministrator has a written agreement; and
(2) retained as part of the official records of the administratorfor a period of not less than five (5) years after the terminationof the trust.
(d) The written agreement required under subsection (a) must:
(1) include a statement of functions that the administrator willperform on behalf of the insurer;
(2) specify the lines, classes, or types of coverage that theadministrator is authorized to administer on behalf of theinsurer; and
(3) contain provisions concerning the standard of underwritingrequired by the insurer.
(e) The commissioner may require any written agreementexecuted by an administrator and an insurer to be filed with thedepartment at the time the administrator applies for a license underthis chapter. The commissioner may require any written agreementexecuted subsequent to the original issue of the license to theadministrator to be filed with the department at the time theadministrator is applying for renewal of the license.
(f) An administrator or insurer may, with written notice, terminatea written agreement for cause as provided in the written agreement.The insurer may suspend the underwriting authority of theadministrator during the pendency of a dispute regarding the causefor termination of the written agreement. The insurer shall fulfilllawful obligations with respect to coverage affected by the writtenagreement, regardless of a dispute described in this subsection.
As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.2; P.L.160-2003, SEC.5.
IC 27-1-25-3
Presumptions as to payment of premiums and claims
Sec. 3. (a) If an insurer utilizes the services of an administrator:
(1) premiums or charges for coverage paid by or on behalf ofthe covered individual are considered to have been received bythe insurer when paid to the administrator; and
(2) claims or return premiums paid by the insurer to theadministrator are not considered to have been paid to thecovered individual or claimant until the payment is received bythe covered individual or claimant. (b) This section does not limit the rights of an insurer against anadministrator resulting from the failure of the administrator to makepayments to the insurer, covered individuals, or claimants.
As added by Acts 1980, P.L.168, SEC.2. Amended by P.L.26-1991,SEC.19; P.L.160-2003, SEC.6.
IC 27-1-25-4
Books and records; maintenance; inspection; transfer; ownership;notice of material change; maintenance of bond
Sec. 4. (a) An administrator:
(1) shall maintain at its principal administrative office booksand records of all transactions between the administrator andinsurers for at least five (5) years after the creation of the booksand records; or
(2) may transfer the books and records of transactions betweenthe administrator and an insurer with which the administratorhas entered into a written agreement under section 2 of thischapter to a new administrator if:
(A) the agreement between the administrator and the insureris canceled; and
(B) a written agreement for a transfer of the books andrecords is made between the administrator and the insurer.
If the books and records are transferred to a new administrator undersubdivision (2), the new administrator shall acknowledge in writingthat the new administrator is responsible for retaining the books andrecords of the prior administrator as required under subdivision (1).The books and records must be maintained in accordance withgenerally accepted standards of insurance record keeping.
(b) The commissioner is entitled to inspect all books and recordsof the administrator for the purpose of examinations and audits.Trade secrets contained within those books and records, includingthe identity and addresses of policyholders and certificate holders,financial information concerning the administrator, and the businessplan of the administrator, are to remain confidential. However, thecommissioner may use that confidential information in proceedingsinstituted against the administrator.
(c) An insurer is the owner of records that:
(1) are generated by an administrator with which the insurer hasentered 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 tobooks and records necessary to fulfill the administrator's contractualobligations to covered individuals, claimants, and the insurer.
(d) An administrator that is licensed under section 11.1 of thischapter shall make available for inspection by the commissionercopies of written agreements with insurers.
(e) An administrator that is licensed under section 11.1 of thischapter shall:
(1) produce the administrator's accounts, records, and files for
examination; and
(2) make the administrator's officers available to provideinformation concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(f) An administrator that is licensed under section 11.1 of thischapter shall immediately notify the commissioner of a materialchange in:
(1) the ownership or control of the administrator; or
(2) another fact or circumstance that affects the administrator'squalification for a license.
The commissioner, upon receiving notice under this subsection, shallreport the change to an electronic data base maintained by the NAICor an affiliate or a subsidiary of the NAIC.
(g) An administrator that is licensed under section 11.1 of thischapter and that administers a governmental plan or a church planshall maintain a bond:
(1) for the use and benefit of:
(A) the commissioner; and
(B) the insurance regulator of any state in which theadministrator is authorized to conduct business; and
(2) that covers an individual and a person that has remittedpremiums, insurance, charges, or other money to theadministrator 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 inconnection with governmental plans or church plans in Indiana andall other states in which the administrator is authorized to conductbusiness.
As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.3; P.L.2-1995, SEC.102; P.L.160-2003, SEC.7.
IC 27-1-25-5
Advertising
Sec. 5. An administrator may use advertising relating to thebusiness underwritten by an insurer only to the extent that theadvertising has been approved in writing by that insurer before theadvertising is used.
As added by Acts 1980, P.L.168, SEC.2. Amended by P.L.160-2003,SEC.8.
IC 27-1-25-5.5
Insurer responsibilities
Sec. 5.5. (a) If an insurer uses the services of an administrator, theinsurer is responsible for:
(1) determining the:
(A) benefits;
(B) premium rates;
(C) underwriting criteria; and
(D) claims payment procedures;
that apply to the coverage; and (2) securing reinsurance.
(b) An insurer shall provide to an administrator, with the writtenagreement required under section 2 of this chapter:
(1) the rules that the administrator must follow in administeringthe coverage, as determined under subsection (a); and
(2) the responsibilities of the administrator as to administeringthe coverage.
(c) An insurer that uses the services of an administrator has soleresponsibility for the competent administration of benefit programsprovided by the insurer.
(d) If an administrator administers benefits for more than onehundred (100) covered individuals on behalf of an insurer, theinsurer shall, not less than semiannually, review the operations of theadministrator. At least one (1) of the semiannual reviews must be anonsite audit of the operations of the administrator.
As added by P.L.160-2003, SEC.9.
IC 27-1-25-6
Fiduciary status of administrator; fiduciary accounts
Sec. 6. (a) An administrator is a fiduciary in collecting orreturning premiums or charges for the insurer with whom it has awritten agreement for administrative services.
(b) Funds collected by the administrator shall be immediatelyremitted to the person entitled to the funds or deposited in a fiduciaryaccount, which shall be established and maintained by theadministrator in a federally insured or state insured financialinstitution.
(c) The administrator shall maintain records clearly showing thedeposits and withdrawals from the fiduciary account for each insurerwith whom it has a written agreement for administrative services.The administrator shall furnish to the insurer:
(1) upon the insurer's request, copies of the required records;and
(2) at intervals specified in the written agreement, a periodicaccounting of transactions performed by the administratorpertaining to the business underwritten by the insurer.
(d) Subject to the written agreement required by section 2 of thischapter, withdrawals from the fiduciary account shall only be madefor the following:
(1) Remittance to an insurer entitled to the funds.
(2) Deposit in an account maintained in the name of the insurerwith whom the administrator has a written agreement.
(3) Transfer to and deposit in a claims paying account, withclaims to be paid as required under section 7 of this chapter.
(4) Payment to a group policyholder for remittance to theinsurer entitled to the funds.
(5) Payment to the administrator for its commission, fees, orcharges.
(6) Remittance of return premiums to the person entitled to thefunds. (e) An administrator may not pay any claim with moneywithdrawn from a fiduciary account established under subsection (b)in which premiums or charges are deposited.
As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.4; P.L.26-1991, SEC.20; P.L.160-2003, SEC.10.
IC 27-1-25-7
Payment of claims
Sec. 7. All claims paid by an administrator from funds collectedon behalf of an insurer shall only be paid on drafts or checksauthorized by the insurer.
As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.5; P.L.160-2003, SEC.11.
IC 27-1-25-7.5
Recoding of claims; notification
Sec. 7.5. (a) As used in this section, "administrator" means aperson that administers claims for health care services under aninsurance policy.
(b) As used in this section, "health care services" has the meaningset forth in IC 27-8-11-1.
(c) As used in this section, "insurance policy" means a policy thatprovides the kind or kinds of insurance described in Class 1(b) orClass 2(a) of IC 27-1-5-1 on an individual, group, franchise, orblanket basis or through a preferred provider plan (as defined inIC 27-8-11-1).
(d) As used in this section, "insured" means an individual entitledto coverage under an insurance policy.
(e) As used in this section, "recode" means to change a code usedby a provider of health care services on a claim for covered servicesprovided to an insured to a different classification code using themost current edition of either of the following:
(1) International Classification of Diseases.
(2) Current Procedural Terminology.
(f) An administrator may not recode a claim unless theadministrator provides written notice to the insured and the providerthat the administrator has recoded the claim together with:
(1) the insurer's explanation of benefits to the insured; and
(2) an explanation of remittance to the provider of the healthcare services.
(g) The notification required under subsection (f) must include atleast the following:
(1) An appropriate ANSI code or other reason code, or both,along with a specific description of the reasons for recoding theclaim.
(2) A toll free number that the provider or the insured may useto contact the administrator to obtain additional information.
(3) The procedure that a provider may use to submit a requestfor a review of the initial decision to recode a claim.
(4) A list of additional information that the provider must
submit in a request for a review of the initial decision to recodea claim.
As added by P.L.207-1999, SEC.2 and P.L.255-1999, SEC.2.
IC 27-1-25-8
Administrator compensation
Sec. 8. (a) An administrator may not enter into an agreement orunderstanding with an insurer if the effect of the agreement orunderstanding is to make the amount of a:
(1) commission;
(2) fee; or
(3) charge;
that is payable to the administrator contingent on savings effected inthe adjustment, settlement, and payment of losses covered by theinsurer's obligations.
(b) This section does not prevent an administrator from receivingperformance based compensation for providing hospital auditingservices or other auditing services.
As added by Acts 1980, P.L.168, SEC.2. Amended by P.L.26-1991,SEC.21; P.L.160-2003, SEC.12.
IC 27-1-25-9
Delivery of written communications
Sec. 9. Policies, certificates, booklets, termination notices, orother written communications delivered by an insurer to anadministrator for delivery to its covered individuals shall bedelivered by the administrator promptly after receipt of instructionsfrom the insurer to do so.
As added by Acts 1980, P.L.168, SEC.2. Amended by P.L.160-2003,SEC.13.
IC 27-1-25-10
Notice of relationship; statement of premiums or charges
Sec. 10. (a) An administrator having a written agreement with aninsurer shall provide written notice, which must first be approved bythe insurer, to covered persons advising them of the relationshipamong the administrator, the covered person, and the insurer.
(b) When the administrator collects premiums or charges, theadministrator shall state separately the amount of any premium orcharge for coverage specified by the insurer to the person paying thepremium or charge. Additional charges may not be made for aservice to the extent that the charge for the service has been paid bythe insurer.
(c) The administrator shall disclose to the insurer:
(1) charges;
(2) fees; and
(3) commissions;
received by the administrator in connection with the provision ofadministrative services for the insurer, including fees or commissionspaid by insurers that provide reinsurance.As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.6; P.L.160-2003, SEC.14.
IC 27-1-25-11
Repealed
(Repealed by P.L.160-2003, SEC.28.)
IC 27-1-25-11.1
Resident administrator license; commissioner refusal to issuelicense; notice of material change; maintenance of bond
Sec. 11.1. (a) If the home state of a person is Indiana, the personshall:
(1) apply to act as an administrator in Indiana upon the uniformapplication; and
(2) receive a license from the commissioner;
before performing the function of an administrator in Indiana.
(b) The uniform application must include or be accompanied bythe following:
(1) Basic organizational documents of the applicant, including:
(A) articles of incorporation;
(B) articles of association;
(C) partnership agreement;
(D) trade name certificate;
(E) trust agreement;
(F) shareholder agreement;
(G) other applicable documents; and
(H) amendments to the documents specified in clauses (A)through (G).
(2) Bylaws, rules, regulations, or other documents that regulatethe internal affairs of the applicant.
(3) The NAIC biographical affidavits for individuals who areresponsible for the conduct of affairs of the applicant,including:
(A) members of the applicant's:
(i) board of directors;
(ii) board of trustees;
(iii) executive committee; or
(iv) other governing board or committee;
(B) principal officers, if the applicant is a corporation;
(C) partners or members, if the applicant is:
(i) a partnership;
(ii) an association; or
(iii) a limited liability company;
(D) shareholders or members that hold, directly or indirectly,at least ten percent (10%) of the:
(i) voting stock;
(ii) voting securities; or
(iii) voting interest;
of the applicant; and
(E) any other person who exercises control or influence over
the affairs of the applicant.
(4) Financial information reflecting a positive net worth,including:
(A) audited annual financial statements prepared by anindependent certified public accountant for the two (2) mostrecent fiscal years; or
(B) if the applicant has been in business for less than two (2)fiscal years, financial statements or reports that are:
(i) prepared in accordance with GAAP; and
(ii) certified by an officer of the applicant;
for any completed fiscal years and for any month during thecurrent fiscal year for which financial statements or reportshave been completed.
If an audited financial statement or report required under clause(A) or (B) is prepared on a consolidated basis, the statement orreport must include a columnar consolidating or combiningworksheet that includes the amounts shown on the consolidatedaudited financial statement or report, separately reported on theworksheet for each entity included on the statement or report,and an explanation of consolidating and eliminating entries.
(5) Information determined by the commissioner to benecessary for a review of the current financial condition of theapplicant.
(6) A description of the business plan of the applicant,including:
(A) information on staffing levels and activities proposed inIndiana and nationwide; and
(B) details concerning the applicant's ability to provide asufficient number of experienced and qualified personnelfor:
(i) claims processing;
(ii) record keeping; and
(iii) underwriting.
(7) Any other information required by the commissioner.
(c) An administrator that applies for licensure under this sectionshall make copies of written agreements with insurers available forinspection by the commissioner.
(d) An administrator that applies for licensure under this sectionshall:
(1) produce the administrator's accounts, records, and files forexamination; and
(2) make the administrator's officers available to provideinformation concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(e) The commissioner may refuse to issue a license under thissection if the commissioner determines that:
(1) the administrator or an individual who is responsible for theconduct 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
(ii) administrator certificate of authority or administratorlicense;
denied or revoked for cause by any jurisdiction;
(2) the financial information provided under subsection (b)(4)does not reflect that the applicant has a positive net worth; or
(3) any of the grounds set forth in section 12.4 of this chapterexists with respect to the administrator.
(f) An administrator that applies for a license under this sectionshall 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'squalification for a license.
The commissioner, upon receiving notice under this subsection, shallreport the change to an electronic data base maintained by the NAICor an affiliate or a subsidiary of the NAIC.
(g) An administrator that applies for a license under this sectionand will administer a governmental plan or a church plan shall obtaina bond as required under section 4(g) of this chapter.
(h) A license that is issued under this section is valid until:
(1) the license is:
(A) surrendered; or
(B) suspended or revoked by the commissioner; or
(2) the administrator:
(A) ceases to do business in Indiana; or
(B) is not in compliance with this chapter.
As added by P.L.160-2003, SEC.15.
IC 27-1-25-12
Repealed
(Repealed by P.L.160-2003, SEC.28.)
IC 27-1-25-12.2
Nonresident administrator license; commissioner refusal to issuelicense or delay of issuance
Sec. 12.2. (a) An administrator that:
(1) performs the duties of an administrator in Indiana; and
(2) does not hold a license issued under section 11.1 of thischapter;
shall obtain a nonresident administrator license under this section byfiling a uniform application with the commissioner.
(b) Unless the commissioner verifies the nonresidentadministrator's home state license status through an electronic database maintained by the NAIC or by an affiliate or a subsidiary of theNAIC, a uniform application filed under subsection (a) must be
accompanied by a letter of certification from the nonresidentadministrator's home state, verifying that the nonresidentadministrator holds a resident administrator license in the home state.
(c) A nonresident administrator is not eligible for a nonresidentadministrator license under this section unless the nonresidentadministrator is licensed as a resident administrator in a home statethat has a law or regulation that is substantially similar to thischapter.
(d) Except as provided in subsections (b) and (h), thecommissioner shall issue a nonresident administrator license to anonresident administrator that makes a filing under subsections (a)and (b) upon receipt of the filing.
(e) Unless a nonresident administrator is notified by thecommissioner that the commissioner is able to verify the nonresidentadministrator's home state licensure through an electronic data basedescribed in subsection (b), the nonresident administrator shall:
(1) on September 15 of each year, file a statement with thecommissioner affirming that the nonresident administratormaintains a current license in the nonresident administrator'shome state; and
(2) pay a filing fee as required by the commissioner.
The commissioner shall collect a filing fee required undersubdivision (2) and deposit the fee into the department of insurancefund established by IC 27-1-3-28.
(f) A nonresident administrator that applies for licensure underthis section shall:
(1) produce the accounts of the nonresident administrator;
(2) produce the records and files of the nonresidentadministrator for examination; and
(3) make the officers of the nonresident administrator availableto provide information with respect to the affairs of thenonresident administrator;
when reasonably required by the commissioner.
(g) A nonresident administrator is not required to hold anonresident administrator license in Indiana if the nonresidentadministrator's function in Indiana is limited to the administration oflife, health, or annuity coverage for a total of not more than onehundred (100) Indiana residents.
(h) The commissioner may refuse to issue or may delay theissuance of a nonresident administrator license if the commissionerdetermines that:
(1) due to events occurring; or
(2) based on information obtained;
after the nonresident administrator's home state's licensure of thenonresident administrator, the nonresident administrator is unable tocomply with this chapter or grounds exist for the home state'srevocation or suspension of the nonresident administrator's homestate license.
(i) If the commissioner makes a determination described insubsection (h), the commissioner: (1) shall provide written notice of the determination to theinsurance regulator of the nonresident administrator's homestate; and
(2) may delay the issuance of a nonresident administratorlicense to the nonresident administrator until the commissionerdetermines that the nonresident administrator is able to complywith this chapter and that grounds do not exist for the homestate's revocation or suspension of the nonresidentadministrator's home state license.
As added by P.L.160-2003, SEC.16. Amended by P.L.173-2007,SEC.17; P.L.234-2007, SEC.191.
IC 27-1-25-12.3
Resident administrator annual filings
Sec. 12.3. (a) An administrator that is licensed under section 11.1of this chapter shall, not later than July 1 of each year unless thecommissioner grants an extension of time for good cause, file areport for the previous calendar year that complies with thefollowing:
(1) The report must contain financial information reflecting apositive net worth prepared in accordance with section11.1(b)(4) of this chapter.
(2) The report must be in the form and contain mattersprescribed by the commissioner.
(3) The report must be verified by at least two (2) officers of theadministrator.
(4) The report must include the complete names and addressesof insurers with which the administrator had a writtenagreement during the preceding fiscal year.
(5) The report must be accompanied by a filing fee determinedby the commissioner.
The commissioner shall collect a filing fee paid under subdivision (5)and deposit the fee into the department of insurance fund establishedby IC 27-1-3-28.
(b) The commissioner shall review a report filed under subsection(a) not later than September 1 of the year in which the report is filed.Upon completion of the review, the commissioner shall:
(1) issue a certification to the administrator:
(A) indicating that:
(i) the financial statement reflects a positive net worth; and
(ii) the administrator is currently licensed and in goodstanding; or
(B) noting deficiencies found in the report; or
(2) update an electronic data base that is maintained by theNAIC or by an affiliate or a subsidiary of the NAIC:
(A) indicating that the administrator is solvent and incompliance with this chapter; or
(B) noting deficiencies found in the report.
As added by P.L.160-2003, SEC.17. Amended by P.L.173-2007,SEC.18; P.L.234-2007, SEC.192.
IC 27-1-25-12.4
Denial, suspension, or revocation of administrator license
Sec. 12.4. (a) The commissioner shall deny, suspend, or revoke alicense issued under this chapter if the commissioner determines thatthe administrator:
(1) is in unsound financial condition;
(2) engages in methods or practices in the conduct of theadministrator's business so as to render the administrator'scontinued transaction of business in Indiana hazardous orinjurious to covered persons or the public; or
(3) fails to pay a judgment rendered against the administrator inIndiana not more than sixty (60) days after the judgment is finaland all appeals have been exhausted.
(b) The commissioner may deny, suspend, or revoke a licenseissued under this chapter if the commissioner determines that:
(1) the administrator has violated a lawful rule or order of thecommissioner or a provision of the insurance laws of Indiana;
(2) the administrator refuses to be examined or to produce theadministrator's accounts, records, and files for examination;
(3) an individual who is responsible for the conduct of theaffairs of the administrator, including:
(A) a member of the administrator's:
(i) board of directors;
(ii) board of trustees;
(iii) executive committee; or
(iv) other governing board or committee;
(B) a principal officer, if the administrator is a corporation;
(C) a partner or member, if the administrator is:
(i) a partnership;
(ii) an association; or
(iii) a limited liability company;
(D) a shareholder or member that holds, directly orindirectly, ten percent (10%) or more of the:
(i) voting stock;
(ii) voting securities; or
(iii) voting interest;
of the administrator; or
(E) any other person who exercises control or influence overthe affairs of the administrator;
refuses to provide information with respect to theadministrator's business or to perform another legal obligationwith respect to an examination when required by thecommissioner;
(4) the administrator, without just cause:
(A) refuses to pay proper claims or to perform servicesarising under a written agreement;
(B) causes a covered individual to accept less than theamount due to the covered individual; or
(C) causes a covered individual to employ an attorney orbring suit against the administrator to secure full payment or
settlement of a proper claim;
(5) the administrator fails to meet a qualification for whichissuance of the administrator's license could have been refusedif the failure had existed and been known by the commissionerat the time of license issuance;
(6) an individual who is responsible for the conduct of theaffairs of the administrator, including:
(A) a member of the administrator's:
(i) board of directors;
(ii) board of trustees;
(iii) executive committee; or
(iv) other governing board or committee;
(B) a principal officer, if the administrator is a corporation;
(C) a partner or member, if the administrator is:
(i) a partnership;
(ii) an association; or
(iii) a limited liability company;
(D) a shareholder or member that holds, directly orindirectly, ten percent (10%) or more of the:
(i) voting stock;
(ii) voting securities; or
(iii) voting interest;
of the administrator; or
(E) any other person who exercises control or influence overthe affairs of the administrator;
is convicted of or enters a plea of guilty or nolo contendere toa felony, without regard to whether adjudication is withheld;
(7) the administrator's license has been suspended or revoked inanother state; or
(8) the administrator fails to timely file the:
(A) report required under section 12.3 of this chapter; or
(B) statement and pay the filing fee required under section12.2(e) of this chapter.
(c) The commissioner may, in the commissioner's discretion andwithout advance notice or hearing, immediately suspend the licenseof an administrator if the commissioner finds one (1) or more of thefollowing:
(1) The administrator is insolvent or financially impaired.
(2) A proceeding for receivership, conservatorship,rehabilitation, or other delinquency proceeding regarding theadministrator has been commenced in any state.
(3) The financial condition or business practices of theadministrator pose an imminent threat to the public health,safety, or welfare of residents of Indiana.
(d) If the commissioner determines that cause exists for thesuspension or revocation of a license issued under this chapter, thecommissioner may, instead of suspension or revocation, impose acivil penalty not to exceed twenty-five thousand dollars ($25,000)per act or violation upon the administrator. A civil penalty imposedunder this subsection may be enforced in the same manner as a civil
judgment. Civil penalties collected under this subsection shall bedeposited in the state general fund.
As added by P.L.160-2003, SEC.18.
IC 27-1-25-13
Public documents; confidentiality; financial information
Sec. 13. (a) Except as provided by section 4(b) of this chapter, andexcept that all provisions of the written agreement between theadministrator and an insurer shall be treated by the commissioner asconfidential and shall not be open to any member of the public forinspection or copying, all documents submitted to the commissionerunder this chapter are public documents:
(1) when filed by the commissioner; or
(2) thirty (30) days after their receipt by the department.
(b) Any financial information concerning an administratorsubmitted by an administrator to the commissioner must remainconfidential and is not open to any member of the public forinspection or copying. However, the commissioner may use thefinancial information in a proceeding under section 12.4 of thischapter.
As added by Acts 1980, P.L.168, SEC.2. Amended by Acts 1982,P.L.165, SEC.7; P.L.192-1991, SEC.2; P.L.160-2003, SEC.19.
IC 27-1-25-14
Regulations
Sec. 14. The commissioner may, under IC 4-22-2, adoptregulations necessary to implement this chapter.
As added by Acts 1980, P.L.168, SEC.2.
IC 27-1-25-15
Violations; offense; notice
Sec. 15. (a) An administrator acting without a license issued underthis chapter commits a Class C infraction.
(b) The commissioner shall notify the prosecuting attorney or theattorney general of Indiana of violations under subsection (a).
As added by Acts 1980, P.L.168, SEC.2. Amended by P.L.160-2003,SEC.20.
IC 27-1-25-16
Presumption of control
Sec. 16. (a) A presumption of control arising under section 1(e)of this chapter may be rebutted by a showing made in the mannerprovided under IC 27-1-23-3(k) that control does not exist in fact.
(b) In the absence of a presumption that control exists in fact, thecommissioner may determine that control exists in fact after:
(1) providing notice and an opportunity to be heard underIC 4-21.5 to all interested parties; and
(2) making specific findings of fact to support thedetermination.
As added by P.L.160-2003, SEC.21.