CHAPTER 26. POLICY LANGUAGE SIMPLIFICATION
IC 27-1-26
Chapter 26. Policy Language Simplification
IC 27-1-26-1
Definitions
Sec. 1. As used in this chapter:
(a) "Commissioner" refers to the insurance commissioner.
(b) "Company" or "insurer" means a life or health insurancecompany, fraternal benefit society, prepaid health plan, dental careplan, vision care plan, pharmaceutical plan, health maintenanceorganization, and all similar type organizations.
(c) "Department" refers to the insurance department.
(d) "Policy" or "policy form" means:
(1) Any policy, contract, plan, or agreement of life or healthinsurance, including credit life insurance and credit healthinsurance, to be issued in Indiana by a company subject to thischapter.
(2) Any certificate, contract, or policy issued by a fraternalbenefit society.
(3) Any certificate issued under a group insurance policy to beissued for delivery in Indiana.
(e) "Text" means all printed matter except the following:
(1) The name and address of the insurer.
(2) The name, number, or title of the policy.
(3) The table of contents or index.
(4) Captions and subcaptions.
(5) Specification pages.
(6) Schedules or tables.
(7) Language that is drafted to conform to the requirements offederal law, regulation, or federal agency interpretation.
(8) Language required by a collectively bargained agreement.
(9) Medical terminology.
(10) Words that are defined in the policy.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-2
Policies and forms not subject to chapter
Sec. 2. (a) This chapter does not apply to:
(1) A policy that is security subject to federal jurisdiction.
(2) A group policy, other than a group credit life insurancepolicy or a group credit health insurance policy.
(3) A group annuity contract that serves as a funding vehicle forpension, profit-sharing, or deferred compensation plans.
(4) A form used in connection with a policy issued for deliveryon a form approved or permitted to be issued for delivery inIndiana.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-3
Minimum requirements Sec. 3. Except as otherwise provided in this chapter, a policyissued for delivery in Indiana must meet the following minimumrequirements:
(1) The text achieves a minimum score of forty (40) on theFlesch reading ease test or an equivalent score on a comparabletest approved by the commissioner as provided by section 6 ofthis chapter.
(2) It is printed, except for specification pages, schedules, andtables, in not less than ten (10) point type, one (1) point leaded.
(3) The style, arrangement, and overall appearance of the policygive no undue prominence to any portion of the text of thepolicy or to any endorsements or riders.
(4) It must contain a table of contents or an index of theprincipal sections of the policy if:
(A) the policy has three thousand (3,000) or more words; or
(B) the policy has three (3) or more pages.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-4
Non-English language policies
Sec. 4. A non-English language policy that is issued for deliveryin Indiana is in compliance with this chapter if the insurer issuing thepolicy certifies that the policy if translated into English wouldcomply with section 3 of this chapter.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-5
Flesch reading ease score; procedure to determine; rules ofconstruction
Sec. 5. (a) The following procedure shall be used in determiningthe Flesch reading ease score:
(1) First, a sample of the text of the policy shall be chosen foranalysis:
(A) For policy forms containing ten thousand (10,000) or lesswords of text, the entire policy form shall be analyzed.
(B) For policy forms containing ten thousand and one (10,001)or more words of text, two (2) samples of two hundred (200)words from each page, with each sample separated by at leasttwenty (20) lines, may be analyzed instead of the entire form.
(2) Second, the number of words and sentences in the text shallbe counted and the total number of words shall be divided bythe total number of sentences. The figure obtained shall bemultiplied by a factor of one and fifteen thousandths (1.015).
(3) Third, the total number of syllables shall be counted anddivided by the total number of words. The figure obtained shallbe multiplied by a factor of eighty-four and six tenths (84.6).
(4) Fourth, the sum of the figures computed under subdivisions(2) and (3) when subtracted from two hundred six and eighthundred thirty-five thousandths (206.835) equals the Fleschreading ease score for the policy form. (b) For the purposes of subsections (a)(2) through (4), thefollowing rules of construction shall be used:
(1) A contraction, hyphenated word, or numbers and letters,when separated by spaces, shall be treated as one (1) word.
(2) A unit of words ending with a period, semicolon, or colon,but excluding headings and captions, shall be counted as asentence.
(3) The term "syllable" means a unit of spoken languageconsisting of one (1) or more letters of a word as divided by adictionary approved by the commissioner.
(4) When a dictionary approved by the commissioner showstwo (2) or more equally acceptable pronunciations of a word,the pronunciation containing fewer syllables may be used.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-6
Reading ease; alternative tests
Sec. 6. The commissioner may approve the use of any otherreading ease test as an alternative to the Flesch reading ease test if itis comparable in result to the Flesch reading ease test.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-7
Certificate of insurer to accompany policy filed with department;contents; additional information
Sec. 7. (a) A policy filed with the department must beaccompanied by a certificate signed by an officer of the insurerstating that:
(1) the policy meets the minimum reading ease score on the testused; or
(2) the score for the policy is lower than the minimum requiredbut should be approved in accordance with section 9 of thischapter.
(b) To confirm the accuracy of a certification under subsection(a), the commissioner may require the submission of additionalinformation to verify the certification.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-8
Separate test scores permitted for riders, endorsements,applications, and other forms
Sec. 8. At the option of an insurer, riders, endorsements,applications, and other forms made a part of the policy may bescored separately.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-9
Policies with failing scores; issuance for delivery authorized uponcertain findings
Sec. 9. The commissioner may authorize a policy to be issued for
delivery in Indiana with a score lower than the score required bysection 3 of this chapter if he finds that the lower score:
(1) will provide a more accurate reflection of the readability ofa policy form;
(2) is necessary because of the nature of a particular policy formor type or class of policy forms; or
(3) is caused by policy language that is drafted to conform tothe requirements of Indiana law, regulation, or agencyinterpretation.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-10
Compliance with other laws
Sec. 10. A policy form meeting the requirements of this chaptershall be approved notwithstanding the requirements of any other lawthat specifies the contents of policies, only if the policy formprovides the policyholders and claimants with protection as favorableas they are entitled to under that law.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-11
Regulations
Sec. 11. The commissioner may adopt regulations under IC 4-22-2necessary to administer this chapter.
As added by Acts 1981, P.L.245, SEC.1.
IC 27-1-26-12
Application of chapter
Sec. 12. This chapter applies to all policy forms filed after June30, 1982. A policy may not be issued for delivery in Indiana afterJune 30, 1985, unless approved by the commissioner or permitted tobe issued under this chapter. A policy that has been approved orpermitted to be issued under this chapter before July 1, 1985, andthat meets the standards of this chapter does not need to be refiled forapproval on July 1, 1985, but may continue being issued in Indianaupon filing with the commissioner a list of those forms, identified byform number, and accompanied by a certificate for each form asprovided by section 7 of this chapter.
As added by Acts 1981, P.L.245, SEC.1.