CHAPTER 3. GENERAL POWERS AND DUTIES OF THE DEPARTMENT
IC 27-1-3
Chapter 3. General Powers and Duties of the Department
IC 27-1-3-1
Exemption from individual liability
Sec. 1. Neither the insurance commissioner nor the severalofficers and employees of the department shall be liable, in theirindividual capacity, except to the state of Indiana, for any act doneor omitted in connection with the performance of their respectiveduties under the provisions of this article.
(Formerly: Acts 1935, c.162, s.8.) As amended by P.L.252-1985,SEC.5.
IC 27-1-3-2
Conflicts of interest
Sec. 2. Neither the insurance commissioner, during his term ofoffice, nor any deputy, actuary, securities clerk, examiner oremployee shall be directly or indirectly interested in any insurancecompany, except as an ordinary policyholder.
(Formerly: Acts 1935, c.162, s.9.)
IC 27-1-3-3
Seal of department
Sec. 3. The department of insurance shall have an official seal ofsuch design as may be approved by the insurance commissioner.
(Formerly: Acts 1935, c.162, s.10.)
IC 27-1-3-4
Business practices of insurance companies
Sec. 4. Every insurance company to which this article isapplicable:
(1) shall conduct and transact its business in a safe and prudentmanner;
(2) shall maintain such company in a safe and solvent condition;and
(3) shall establish and maintain safe and sound methods for theconduct of such insurance company and its business andprudential affairs.
(Formerly: Acts 1935, c.162, s.11.) As amended by P.L.252-1985,SEC.6.
IC 27-1-3-5
Certified copies of documents and commissioner's certification offacts as prima facie evidence
Sec. 5. Copies of all certificates, documents, reports, or otherpapers lawfully received and filed by the department pursuant to thisarticle or any other law of this state, when duly certified by thecommissioner or any deputy and authenticated by the official seal ofthe department, shall be taken and received in all courts and placesas prima facie evidence of the facts therein stated, and a certificate
from the commissioner under the official seal of the department asto the existence or nonexistence of the facts relating to any insurancecompany which would not appear from a certified copy of any paperlawfully filed with the department shall be taken and received in allcourts and places as prima facie evidence of the existence ornonexistence of the facts therein stated.
(Formerly: Acts 1935, c.162, s.12.) As amended by P.L.252-1985,SEC.7.
IC 27-1-3-6
Commissioner's annual report
Sec. 6. During December the commissioner shall report to thegovernor the names of all insurance companies which are in thecharge of the department for rehabilitation, liquidation orconservation and such information in regard to those companies asthe commissioner may deem pertinent.
(Formerly: Acts 1935, c.162, s.13.) As amended by Acts 1979,P.L.17, SEC.54.
IC 27-1-3-7
Rules and regulations
Sec. 7. (a) The department may promulgate rules and regulationsfor any of the following enumerated purposes:
(1) For the conduct of the work of the department.
(2) Prescribing the methods and standards to be used in makingthe examinations and prescribing the forms of reports of theseveral insurance companies to which IC 27-1 is applicable.
(3) Defining what is a safe or an unsafe manner and a safe or anunsafe condition for conducting business by any insurancecompany to which IC 27-1 is applicable.
(4) For the establishment of safe and sound methods for thetransaction of business by such insurance companies and for thepurpose of safeguarding the interests of policyholders,creditors, and shareholders respecting the withdrawal orpayment of funds by any life insurance company in times ofemergency. Any rule or regulation promulgated under thissubdivision may apply to one (1) or more insurance companiesas the department may determine.
(5) For the administration and termination of the affairs of anysuch insurance company which is in involuntary liquidation orwhose business and property have been taken possession of bythe department for the purpose of rehabilitation, liquidation,conservation, or dissolution under IC 27-1.
(6) For the regulation of the solicitation or use of proxies, ingeneral and as they concern consents or authorizations, inrespect of securities issued by any domestic stock company forthe purpose of protecting investors by prescribing the form ofproxies, including such consents or authorizations, and byrequiring adequate disclosure of information relevant to suchproxies, including such consents or authorizations, and relevant
to the business to be transacted at any meeting of shareholderswith respect to which such proxies, including such consents orauthorizations, may be used, which regulations may, in general,conform to those prescribed by the National Association ofInsurance Commissioners.
(b) The department may adopt a rule under IC 4-22-2 to providereasonable simplification of the terms and coverage of individual andgroup Medicare supplement accident and sickness insurance policiesand individual and group Medicare supplement subscriber contractsin order to facilitate public understanding and comparison and toeliminate provisions contained in those policies or contracts whichmay be misleading or confusing in connection either with thepurchase of those coverages or with the settlement of claims and toprovide for full disclosure in the sale of those coverages.
(Formerly: Acts 1935, c.162, s.14; Acts 1965, c.178, s.1.) Asamended by Acts 1978, P.L.2, SEC.2702; Acts 1980, P.L.168, SEC.1;Acts 1981, P.L.233, SEC.1; Acts 1982, P.L.159, SEC.1;P.L.114-1991, SEC.8.
IC 27-1-3-8
Repealed
(Repealed by P.L.26-1991, SEC.28.)
IC 27-1-3-9
Repealed
(Repealed by P.L.26-1991, SEC.28.)
IC 27-1-3-10
Power to revoke or suspend certificate of authority
Sec. 10. The commissioner shall have power:
(1) to revoke or suspend the authority to do business in thisstate of any company which refuses to permit an examinationunder IC 27-1-3.1; and
(2) to revoke or suspend any certificate of authority when anycondition prescribed by law for granting it no longer exists.
(Formerly: Acts 1935, c.162, s.17.) As amended by P.L.26-1991,SEC.3.
IC 27-1-3-10.5
Disclosure of information
Sec. 10.5. (a) As used in this section, "confidential information"means information that has been designated as confidential bystatute, rule, or regulation issued under a statute.
(b) The commissioner may not:
(1) disclose; or
(2) subject to subpoena;
financial information regarding material transactions disclosed by aninsurer under IC 27-2-18.
(c) The commissioner may not disclose any information, includingany document or report received from: (1) the National Association of Insurance Commissioners; or
(2) an insurance department of another state;
if the information is designated as confidential information in theother jurisdiction.
(d) The commissioner may share confidential information with:
(1) the National Association of Insurance Commissioners; or
(2) an insurance department of another state;
on the condition that the National Association of InsuranceCommissioners and the other state agree to maintain the same levelof confidentiality that is provided to the information under Indianalaw.
As added by P.L.251-1995, SEC.1.
IC 27-1-3-11
Confidential information
Sec. 11. (a) The commissioner or any deputy, actuary, assistant,examiner, or employee or any other person having access to anyinformation obtained through an examination conducted underIC 27-1-3.1 may not disclose to any person, other than officially tothe department, by the report made to it, or to the board of directors,trustees, partners, attorney-in-fact, or owners, or in compliance withan order of a court, any information concerning the affairs of anyinsurance company as shown by the report of the examination ofsuch company by the department. However, this prohibition againstdisclosure does not apply after the report of the examiners has beensubmitted to the department and the department has in turn submittedthe report with its recommendations, if any, to the board of directors,trustees, partners, attorney-in-fact, or owners.
(b) This section does not prohibit the publication by any companyof the facts contained in its own examination.
(Formerly: Acts 1935, c.162, s.18; Acts 1969, c.164, s.6.) Asamended by Acts 1978, P.L.2, SEC.2703; P.L.17-1984, SEC.7;P.L.159-1986, SEC.1; P.L.26-1991, SEC.4.
IC 27-1-3-12
Acceptance of examination made by another state
Sec. 12. The department may in its discretion accept anyexamination of any insurance company made by the commissioners'convention or by the proper authority of the state in which a foreignor alien company is domiciled in lieu of the examination made underthe provisions of this article.
(Formerly: Acts 1935, c.162, s.19.) As amended by P.L.252-1985,SEC.9.
IC 27-1-3-13
Blanks for annual statement; separate exhibit
Sec. 13. (a) Each company authorized to conduct business inIndiana and required to file an annual statement with the departmentunder IC 27-1-20-21 shall submit the company's statement on theNational Association of Insurance Commissioners (NAIC) Annual
Statement Blank prepared in accordance with NAIC AnnualStatement Instructions, and following practices and proceduresprescribed by the most recent NAIC Accounting Practices andProcedures Manual.
(b) To the extent that the NAIC Annual Statement Instructionsrequire disclosure under subsection (a) of compensation paid to or onbehalf of an insurer's officers, directors, or employees, theinformation may be filed with the department as an exhibit separatefrom the annual statement blank. The compensation informationdescribed under this subsection shall be maintained by thedepartment as confidential and may not be made public.
(Formerly: Acts 1935, c.162, s.20; Acts 1963, c.154, s.1.) Asamended by P.L.130-1994, SEC.1; P.L.116-1994, SEC.5;P.L.251-1995, SEC.2.
IC 27-1-3-14
Notice of insolvency, failure, or suspension of operations; failure togive notice
Sec. 14. If any domestic insurance company is insolvent, or inimminent danger of insolvency, or fails or suspends operationbetween the periods of examination authorized, it is a Class Bmisdemeanor for the highest officer then actively in charge of suchdomestic insurance company to knowingly fail to notify thedepartment immediately, of such condition, failure, or suspension.
(Formerly: Acts 1935, c.162, s.21.) As amended by Acts 1978, P.L.2,SEC.2704.
IC 27-1-3-15
Filing fees; collection
Sec. 15. (a) Except as provided in subsections (f) and (h), thecommissioner shall collect the following filing fees:
Document Fee
Articles of incorporation $ 350
Amendment of articles of
incorporation $ 10
Filing of annual statement
and consolidated statement $ 100
Annual renewal of company license
fee $ 50
Withdrawal of certificate
of authority $ 25
Certified statement of condition $ 5
Any other document required to be
filed by this article $ 25
The commissioner shall deposit fees collected under this subsectioninto the department of insurance fund established by section 28 ofthis chapter.
(b) The commissioner shall collect a fee of ten dollars ($10) eachtime process is served on the commissioner under this title.
(c) The commissioner shall collect the following fees for copying
and certifying the copy of any filed document relating to a domesticor foreign corporation:
Per page for copying As determined by
the commissioner
but not to exceed
actual cost
For the certificate $10
(d) Each domestic and foreign insurer and each healthmaintenance organization shall remit annually to the commissionerfor deposit into the department of insurance fund established bysection 28 of this chapter one thousand dollars ($1,000) as aninternal audit fee. All assessment insurers, farm mutuals, andfraternal benefit societies shall remit to the commissioner for depositinto the department of insurance fund two hundred fifty dollars($250) annually as an internal audit fee.
(e) Beginning July 1, 1994, each insurer shall remit to thecommissioner for deposit into the department of insurance fundestablished by section 28 of this chapter a fee of thirty-five dollars($35) for each policy, rider, rule, rate, or endorsement filed with thestate, including subsequent filings. Except as provided in subsection(f), each policy, rider, rule, rate, or endorsement that is filed as partof a particular product filing or in association with a particularproduct filing is an individual filing subject to the fee under thissubsection. However, the total amount of fees paid under thissubsection by each insurer for a particular product filing may notexceed one thousand dollars ($1,000).
(f) Beginning July 1, 2009, a policy, rider, rule, rate, orendorsement that is filed as part of a particular product filing or inassociation with a particular product filing for a commercial productdescribed in:
(1) Class 2(b), Class 2(c), Class 2(d), Class 2(e), Class 2(f),Class 2(g), Class 2(h), Class 2(i), Class 2(j), Class 2(k), Class2(l), or Class 2(m) of IC 27-1-5-1; or
(2) Class 3 of IC 27-1-5-1;
is considered to be part of a single filing for which the insurer issubject only to one (1) thirty-five dollar ($35) fee under subsection(e).
(g) The commissioner shall pay into the state general fund by theend of each calendar month the amounts collected during that monthunder subsections (b) and (c).
(h) The commissioner may not collect fees for quarterlystatements filed under IC 27-1-20-33.
(i) The commissioner may adopt rules under IC 4-22-2 to providefor the accrual and quarterly billing of fees under this section.
(Formerly: Acts 1935, c.162, s.22.) As amended by P.L.31-1988,SEC.9; P.L.130-1994, SEC.2; P.L.116-1994, SEC.6; P.L.91-1998,SEC.3; P.L.268-1999, SEC.1; P.L.203-2001, SEC.4; P.L.173-2007,SEC.6; P.L.234-2007, SEC.188; P.L.3-2008, SEC.207.
IC 27-1-3-16 Disposition of taxes and fees collected; payment of expenses
Sec. 16. All taxes provided by this article and all fees accruing tothe department as provided in this article shall be paid into the statetreasury monthly. All expenses incurred and all compensation paidby the department in the administration of this article shall be paidout of the general fund, in the same manner as other state expenseand compensation are paid.
(Formerly: Acts 1935, c.162, s.23.) As amended by P.L.252-1985,SEC.10.
IC 27-1-3-17
Repealed
(Repealed by P.L.4-1988, SEC.17.)
IC 27-1-3-18
Solicitation for political assessments or contributions; violations
Sec. 18. It is a Class A misdemeanor for a person to knowinglysolicit from any officer or employee of the department any money orother property for political assessments or contributions.
(Formerly: Acts 1935, c.162, s.25.) As amended by Acts 1978, P.L.2,SEC.2705.
IC 27-1-3-19
Order to correct improper practices or remedy deficiencies;actions to compel compliance
Sec. 19. (a) Whenever the commissioner determines that anyinsurance company to which this article is applicable:
(1) is conducting its business contrary to law or in an unsafe orunauthorized manner;
(2) has had its capital or surplus fund impaired or reducedbelow the amount required by law; or
(3) has failed, neglected, or refused to observe and comply withany order or rule of the department or commissioner;
then the commissioner may, by an order in writing addressed to theboard of directors, board of trustees, attorney in fact, partners, orowners of or in any such insurance company, to direct thediscontinuance of any such illegal, unauthorized, or unsafe practice,the restoration of an impairment to the capital or the surplus fund, orthe compliance with any such law, order, or rule of the departmentor commissioner. The order shall be mailed to the last knownprincipal office of the insurance company by certified or registeredmail or delivered to an officer of the company and shall beconsidered to be received by the insurance company three (3) daysafter mailing or on the date of delivery.
(b) If the insurance company fails, neglects, or refuses to complywith the terms of that order within thirty (30) days after its receipt bythe insurance company, or within a shorter period set out in the orderif the commissioner determines that an emergency exists, thecommissioner may, in addition to any other remedy conferred uponthe department or the commissioner by law, bring an action against
any such insurance company, its officers, and agents to compel thatcompliance.
(c) The action shall be brought by the commissioner in the MarionCounty circuit court. The action shall be commenced and prosecutedin accordance with the Indiana Rules of Trial Procedure, and relieffor noncompliance of the order includes any remedy appropriateunder the facts, including injunction, preliminary injunction, andtemporary restraining order. In that action, a change of venue fromthe judge, but no change of venue from the county, is permitted.
(Formerly: Acts 1935, c.162, s.26.) As amended by P.L.252-1985,SEC.12; P.L.31-1988, SEC.10.
IC 27-1-3-20
Certificate of authority; issuance; necessity; removal of unqualifiedofficers or directors; violations; civil penalties
Sec. 20. (a) The commissioner may issue a certificate of authorityto any company when it shall have complied with the requirementsof the laws of this state so as to entitle it to do business herein. Thecertificate shall be issued under the seal of the departmentauthorizing and empowering the company to make the kind or kindsof insurance specified in the certificate. No certificate of authorityshall be issued until the commissioner has found that:
(1) the company has submitted a sound plan of operation; and
(2) the general character and experience of the incorporators,directors, and proposed officers is such as to assure reasonablepromise of a successful operation, based on the fact that suchpersons are of known good character and that there is no goodreason to believe that they are affiliated, directly or indirectly,through ownership, control, management, reinsurancetransactions, or other insurance or business relations with anyperson or persons known to have been involved in the impropermanipulation of assets, accounts, or reinsurance.
No certificate of authority shall be denied, however, undersubdivision (1) or (2) until notice, hearing, and right of appeal hasbeen given as provided in IC 4-21.5.
(b) Every company possessing a certificate of authority shallnotify the commissioner of the election or appointment of every newdirector or principal officer, within thirty (30) days thereafter. If inthe commissioner's opinion such a new principal officer or directordoes not meet the standards set forth in this section, he shall requestthat the company effect the removal of such persons from office. Ifsuch removal is not accomplished as promptly as under thecircumstances and in the opinion of the commissioner is possible,then upon notice to both the company and such principal officer ordirector and after notice, hearing, and right of appeal pursuant toIC 4-21.5, and after a finding that such person is incompetent oruntrustworthy or of known bad character, the commissioner mayorder the removal of such person from office and may, unless suchremoval is promptly accomplished, suspend the company's certificateof authority until there is compliance with such order. (c) No company shall transact any business of insurance or holditself out as a company in the business of insurance in Indiana untilit shall have received a certificate of authority as prescribed in thissection.
(d) No company shall make, issue, deliver, sell, or advertise anykind or kinds of insurance not specified in the company's certificateof authority.
(e) Notwithstanding IC 27-1-2-4, a director or officer of acompany who knowingly, intentionally, or recklessly violatessubsection (c) or (d) commits a Class D felony.
(f) The commissioner shall impose a civil penalty of not morethan twenty-five thousand dollars ($25,000) on a director or officerof a company that violates subsection (c) or (d). The amount imposedmust be proportionate to the costs incurred by the department ofinsurance, other governmental entities, and the courts in regulatingthe activity of the director, officer, or company who violatessubsection (c) or (d). A civil penalty imposed under this subsectionmay be enforced in the same manner as a civil judgment.
(Formerly: Acts 1935, c.162, s.27; Acts 1967, c.127, s.1; Acts 1975,P.L.278, SEC.1.) As amended by P.L.7-1987, SEC.135; P.L.67-1998,SEC.1.
IC 27-1-3-21
Execution of instruments or documents
Sec. 21. All rules, regulations, notices, orders, deeds, assignmentsand other instruments or documents issued, executed or promulgatedby the department shall be executed in the name of "the departmentof insurance," on its behalf, by the insurance commissioner, or, incase of his absence or disability, by a deputy insurancecommissioner, and shall be sealed with the official seal of thedepartment; but the commissioner may authorize the execution ofsuch deeds, assignments, releases, petitions, notices or any otherinstruments or documents issued or executed by the department inconnection with the rehabilitation, liquidation or conservation of anyinsurance company by such department in the name of "thedepartment of insurance," by any special deputy commissioner dulyappointed in charge of rehabilitation, liquidation or conservation ofany insurance company; and all such documents so executed by thespecial deputy insurance commissioner need not bear the official sealof the department.
(Formerly: Acts 1935, c.162, s.28.)
IC 27-1-3-22
Fraudulent insurance act; definition; liability
Sec. 22. (a) As used in this section, "fraudulent insurance act"means:
(1) the preparation or presentation of a written statement as partof, or in support of:
(A) a fraudulent application for the issuance or rating of apolicy of commercial insurance; or (B) a fraudulent claim under a policy of commercial orpersonal insurance; or
(2) the concealment, for the purpose of misleading, ofinformation concerning any fact material to an application orclaim described in subdivision (1).
(b) As used in this section, "fraudulent insurance act" includes theact or omission of a person who, knowingly and with intent todefraud, does any of the following:
(1) Presents, causes to be presented, or prepares withknowledge or belief that it will be presented, to or by an insurer,a reinsurer, a purported insurer or reinsurer, a broker, or anagent of an insurer, reinsurer, purported insurer or reinsurer, orbroker, an oral or written statement that the person knows tocontain materially false information as part of, in support of, orconcerning any fact that is material to:
(A) an application for the issuance of an insurance policy;
(B) the rating of an insurance policy;
(C) a claim for payment or benefit under an insurancepolicy;
(D) premiums paid on an insurance policy;
(E) payments made in accordance with the terms of aninsurance policy;
(F) an application for a certificate of authority;
(G) the financial condition of an insurer, a reinsurer, or apurported insurer or reinsurer; or
(H) the acquisition of an insurer or a reinsurer;
or conceals any information concerning a subject set forth inclauses (A) through (H).
(2) Solicits or accepts new or renewal insurance risks by or foran insolvent insurer, reinsurer, or other entity regulated underthis title.
(3) Removes or attempts to remove:
(A) the assets;
(B) the record of assets, transactions, and affairs; or
(C) a material part of the assets or the record of assets,transactions, and affairs;
of an insurer, a reinsurer, or another entity regulated under thistitle, from the home office, other place of business, or place ofsafekeeping of the insurer, reinsurer, or other regulated entity,or conceals or attempts to conceal from the department assetsor records referred to in clauses (A) through (C).
(4) Diverts, attempts to divert, or conspires to divert funds of aninsurer, a reinsurer, another entity regulated under the IndianaCode, or other persons, in connection with any of the following:
(A) The transaction of insurance or reinsurance.
(B) The conduct of business activities by an insurer, areinsurer, or another entity regulated under this title.
(C) The formation, acquisition, or dissolution of an insurer,a reinsurer, or another entity regulated under this title.
(c) A person who acts without malice, fraudulent intent, or bad
faith is not subject to civil liability for filing a report or furnishing,orally or in writing, other information concerning a suspected,anticipated, or completed fraudulent insurance act if the report orother information is provided to or received from any of thefollowing:
(1) The department or an agent, an employee, or a designee ofthe department.
(2) Law enforcement officials or an agent or employee of a lawenforcement official.
(3) The National Association of Insurance Commissioners.
(4) Any agency or bureau of federal or state governmentestablished to detect and prevent fraudulent insurance acts.
(5) Any other organization established to detect and preventfraudulent insurance acts.
(6) An agent, an employee, or a designee of an entity referredto in subdivisions (3) through (5).
(d) This section does not abrogate or modify in any way anycommon law or statutory privilege or immunity.
As added by P.L.159-1986, SEC.2. Amended by P.L.121-1992,SEC.1.
IC 27-1-3-23
Civil actions; substantial justification
Sec. 23. (a) For the purposes of this section, a party is"substantially justified" in initiating a civil action if the action had areasonable basis in law or fact at the time the action was initiated.
(b) If:
(1) a person or entity referred to in section 22(c) of this chapter,or an employee or agent of a person or entity referred to insection 22(c), is the prevailing party in a civil action for libel,slander, or any other relevant tort arising out of the filing of areport or the furnishing of information under section 22(c) ofthis chapter; and
(2) the party who initiated the action was not substantiallyjustified in initiating the action;
the person, entity, employee, or agent referred to in subdivision (1)is entitled to an award of attorney's fees and costs.
As added by P.L.121-1992, SEC.2.
IC 27-1-3-24
Declaration of dividend other than from earned surplus; approval
Sec. 24. (a) As used in this section, "earned surplus" means anamount equal to the unassigned funds of an insurer as set forth in themost recent annual statement of the insurer that is submitted to thecommissioner, excluding surplus arising from unrealized capitalgains or revaluation of assets.
(b) A domestic insurer may not:
(1) declare; or
(2) pay;
a dividend from any source of money other than earned surplus
unless the commissioner approves the payment of the dividendbefore the dividend is paid.
As added by P.L.130-1994, SEC.3 and P.L.116-1994, SEC.7.
IC 27-1-3-25
Review of ordinary shareholder dividends to determinereasonableness
Sec. 25. The department shall establish and maintain a procedureunder which the department, at least one (1) time each year, reviewsthe ordinary shareholder dividends paid by each domestic insurer todetermine whether dividends paid by the insurer are reasonable inrelation to the following:
(1) The adequacy of the level of surplus as regardspolicyholders of the insurer remaining after the payment ofdividends.
(2) The quality of the earnings of the insurer and the extent towhich the reported earnings of the insurer include extraordinaryitems, such as surplus relief, reinsurance transactions, andreserve destrengthening.
As added by P.L.130-1994, SEC.4 and P.L.116-1994, SEC.8.
IC 27-1-3-26
Order to limit ordinary shareholder dividends
Sec. 26. The department shall establish and follow a practiceunder which the department issues an order to a domestic insurer tolimit the payment of ordinary shareholder dividends by the insurer ifthe department determines that the surplus of the insurer as regardspolicyholders:
(1) is not reasonable in relation to the outstanding liabilities ofthe insurer; and
(2) is not adequate to the financial needs of the insurer.
As added by P.L.130-1994, SEC.5 and P.L.116-1994, SEC.9.
IC 27-1-3-27
Order to limit or disallow payment of ordinary shareholderdividends
Sec. 27. The department shall establish and follow a practiceunder which the department issues an order to limit or disallow thepayment of ordinary shareholder dividends by a domestic insurer ifthe domestic insurer is found to be financially distressed or troubled.
As added by P.L.130-1994, SEC.6 and P.L.116-1994, SEC.10.
IC 27-1-3-28
Department of insurance fund; establishment; deposits
Sec. 28. (a) The department of insurance fund is established forthe following purposes:
(1) To provide supplemental funding for the operations of thedepartment of insurance.
(2) To pay the costs of hiring and employing staff.
(3) To provide staff salary differentials as necessary to equalize
the average salaries and staffing levels of the department ofinsurance with the average salaries and staffing levels reportedin the most recent Insurance Department Resources Reportpublished by the National Association of InsuranceCommissioners.
(4) To enable the department of insurance to maintainaccreditation by the National Association of InsuranceCommissioners.
(5) To carry out any other purpose determined necessary by thedepartment of insurance to carry out the department's dutiesunder this title.
(b) The fund shall be administered by the commissioner. Thefollowing shall be deposited in the department of insurance fund:
(1) Audit fees remitted by insurers to the commissioner undersection 15(d) of this chapter.
(2) Filing fees remitted by insurers to the commissioner undersection 15(a) or 15(e) of this chapter.
(3) Any other amounts remitted to the commissioner or thedepartment that are required by rule or statute to be depositedinto the department of insurance fund.
(c) The expenses of administering the fund shall be paid frommoney in the fund.
(d) The treasurer of state shall invest the money in the fund notcurrently needed to meet the obligations of the fund in the samemanner as other public funds may be invested. Interest that accruesfrom these investments shall be deposited in the fund.
(e) Money in the fund at the end of a particular fiscal year doesnot revert to the state general fund.
(f) There is annually appropriated to the department of insurance,for the purposes set forth in subsection (a), the entire amount ofmoney deposited in the fund in each year.
As added by P.L.130-1994, SEC.7 and P.L.116-1994, SEC.11.Amended by P.L.252-1995, SEC.1; P.L.91-1998, SEC.4;P.L.173-2007, SEC.7; P.L.234-2007, SEC.189.
IC 27-1-3-29
Enforceability of policies exceeding authority of insurer orviolating statute or rule
Sec. 29. (a) Except as otherwise provided by statute, a policy isenforceable against the insurer according to its terms, even if thepolicy exceeds the authority of the insurer.
(b) A policy that violates a statute or rule is enforceable againstthe insurer as if the policy conformed to the statute or rule.
(c) Upon the written request of the policyholder or the insuredwhose rights under the policy are continuing and not transitory, aninsurer shall reform and reissue its written policy to comply with therequirements of the law existing at the date of issue or last renewalof the policy.
As added by P.L.268-1999, SEC.2.
IC 27-1-3-30
Mandated health benefit task force
Sec. 30. (a) As used in this section, "accident and sicknessinsurance policy" has the meaning set forth in IC 27-8-14.2-1.
(b) As used in this section, "health maintenance organization" hasthe meaning set forth in IC 27-13-1-19.
(c) As used in this section, "mandated benefit" means certainhealth coverage or an offering of certain health coverage that isrequired under:
(1) an accident and sickness insurance policy; or
(2) a contract with a health maintenance organization.
(d) As used in this section, "mandated benefit proposal" means abill or resolution pending before the general assembly that, ifenacted, would require certain health coverage or an offering ofcertain health coverage under:
(1) an accident and sickness insurance policy; or
(2) a contract with a health maintenance organization.
(e) The commissioner shall establish a task force to reviewmandated benefits and mandated benefit proposals.
(f) The task force must consist of ten (10) members appointed bythe governor as follows:
(1) Two (2) members representing the insurance industry.
(2) Two (2) members representing consumers.
(3) Two (2) members representing health care providers.
(4) Two (2) members representing the business sector.
(5) One (1) member who is an independent actuary.
(6) The commissioner or the commissioner's designee.
A registered lobbyist may not serve as a member of the task force.
(g) Each member of the task force who is not a state employee isentitled to the minimum salary per diem provided byIC 4-10-11-2.1(b). The member is also entitled to reimbursement fortraveling expenses as provided under IC 4-13-1-4 and other expensesactually incurred in connection with the member's duties as providedin the state policies and procedures established by the Indianadepartment of administration and approved by the budget agency.
(h) Each member of the task force who is a state employee isentitled to reimbursement for traveling expenses as provided underIC 4-13-1-4 and other expenses actually incurred in connection withthe member's duties as provided in the state policies and proceduresestablished by the Indiana department of administration andapproved by the budget agency.
(i) Each member of the task force shall attend at least fifty percent(50%) of scheduled meetings. A member who does not comply withthis subsection is subject to replacement by the governor.
(j) The department shall provide administrative and actuarialsupport for the functions of the task force, including the use of theservices of the department's actuary as necessary for the completionof the duties of the task force under this chapter.
(k) Upon the:
(1) request of the legislative services agency on behalf of a
member of the general assembly; or
(2) determination of the task force;
the task force shall assess the social, medical, and financial impactsof at least one (1) mandated benefit or one (1) mandated benefitproposal each year.
(l) In assessing a mandated benefit or mandated benefit proposal,and to the extent that information is available, the task force shallconsider:
(1) social impacts, including:
(A) the extent to which the service that is the subject of themandated benefit or mandated benefit proposal is generallyused by a significant part of the population;
(B) the extent to which the health coverage is alreadygenerally available;
(C) if the health coverage is not generally available, theextent to which the lack of health coverage results inunreasonable financial hardship;
(D) the level of public demand for the service that is thesubject of the mandated benefit or mandated benefitproposal;
(E) the level of public demand for the health coverage; and
(F) the extent to which the service that is the subject of themandated benefit or mandated benefit proposal is coveredunder self-funded health coverage provided by Indianaemployers that employ at least five hundred (500)employees;
(2) medical impacts, including the extent to which the servicethat is the subject of the mandated benefit or mandated benefitproposal is generally:
(A) recognized by the medical community as effective inpatient treatment;
(B) demonstrated by a review of scientific and peer reviewliterature to be recognized by the medical community; and
(C) available and used by treating physicians; and
(3) financial impacts, including the:
(A) extent to which the health coverage will increase ordecrease the cost of the service that is the subject of themandated benefit or mandated benefit proposal;
(B) extent to which the health coverage will increase theappropriate use of the service that is the subject of themandated benefit or mandated benefit proposal;
(C) extent to which the service that is the subject of themandated benefit or mandated benefit proposal will be asubstitute for a more expensive service;
(D) extent to which the health coverage will increase ordecrease the:
(i) administrative expenses of accident and sicknessinsurers and health maintenance organizations; and
(ii) premium and administrative expenses of individualscovered under accident and sickness insurance policies
and health maintenance organization contracts;
(E) impact of the health coverage on the total cost of healthcare in Indiana, including any potential cost savings that maybe realized through the mandated benefit or mandatedbenefit proposal;
(F) impact of all mandated benefits on the ability ofemployers to purchase health coverage that meets employeeneeds;
(G) extent to which the financial impact of all mandatedbenefits, including the mandated benefit or mandated benefitproposal under consideration, will affect employee wagesand compensation; and
(H) extent to which the financial impact of all mandatedbenefits, including the mandated benefit or mandated benefitproposal under consideration, will affect hiring practices ofIndiana employers.
(m) The task force shall annually determine the full cost of allexisting mandated benefits in Indiana as a percentage of:
(1) Indiana's average annual wage; and
(2) health coverage premiums.
(n) In making the annual determination under subsection (m), thetask force shall consider the full cost of existing mandated benefitsunder:
(1) a typical group and individual:
(A) accident and sickness insurance policy; and
(B) health maintenance organization contract;
in Indiana; and
(2) the state employee health plans provided for inIC 5-10-8-7(b) and IC 5-10-8-7(c).
(o) The task force may contract for professional services asnecessary for the completion of the duties of the task force under thischapter.
(p) The task force shall report the findings of the task force in anelectronic format under IC 5-14-6 to the legislative council not laterthan November 1 of each year.
(q) Any recommendations made by the task force must beapproved by at least six (6) members of the task force.
(r) The department may adopt rules under IC 4-22-2 to implementthis section.
(s) Information that identifies a person and that is obtained by thetask force under this section is confidential.
(t) This section expires December 31, 2010.
As added by P.L.166-2003, SEC.1. Amended by P.L.28-2004,SEC.165; P.L.125-2005, SEC.1.
IC 27-1-3-31
Commissioner study and report concerning direct reimbursementby health plans
Sec. 31. (a) Not later than September 1, 2009, each insurer thatissues a policy of accident and sickness insurance (as defined in
IC 27-8-5-1) and each health maintenance organization shall submitto the commissioner specified data and information in a formatprescribed by the commissioner. If data or information from a healthcare provider is determined to be necessary to complete the studyunder subsection (b), the health care provider shall submit the dataor information to the commissioner.
(b) The commissioner shall study the data and informationsubmitted under subsection (a) and make actuarial determinations ofthe savings and costs of implementation of direct reimbursement bythe insurers and health maintenance organizations to out-of-networkhealth care providers for health care services rendered to insuredsand enrollees.
(c) The commissioner shall specify the data and information to besubmitted under subsection (a) to reflect the following:
(1) The costs incurred or savings experienced by the insurer orhealth maintenance organization in implementing directreimbursement to the health care providers.
(2) Operational costs incurred or savings experienced inimplementing direct reimbursement to the health care providers.
(3) The number of additional health care providers, byspecialty, that would be reimbursed by the insurer or healthmaintenance organization after the insurer or healthmaintenance organization implemented direct reimbursement.
(4) Any other costs or savings that an insurer, a healthmaintenance organization, the commissioner, or the chairpersonof the health finance commission established by IC 2-5-23-3determines to be relevant to direct reimbursement.
(d) The commissioner shall report the results of the study andactuarial determinations made under subsection (b) to the healthfinance commission in an electronic format under IC 5-14-6 beforeOctober 15, 2009.
(e) Data and information submitted, and results of the study andactuarial determinations made, under this section that identify anindividual insurer, health maintenance organization, health careprovider, or individual are confidential. However, upon request ofthe chairperson of the health finance commission, the commissionershall:
(1) remove identifying information from; and
(2) provide, to the legislative services agency and members ofthe health finance commission;
the data and information submitted under subsection (a).
(f) This section expires December 31, 2009.
As added by P.L.144-2009, SEC.1.