CHAPTER 6. FORMATION OF DOMESTIC COMPANIES
IC 27-1-6
Chapter 6. Formation of Domestic Companies
IC 27-1-6-1
Authority to incorporate; excluded kinds of insurance
Sec. 1. Any number of natural persons, not less than seven (7), allof whom are eighteen (18) years of age or older, at least a majorityof whom are residents of the state of Indiana and citizens of theUnited States, may form a corporation under the provisions of thischapter for the purpose of making any kind or kinds of insurancedescribed in any one class set out in IC 27-1-5-1, other thanreciprocal, farm mutual, fraternal, and assessment insurance, bycomplying with the provisions of this chapter.
(Formerly: Acts 1935, c.162, s.61; Acts 1973, P.L.270, SEC.1.) Asamended by P.L.252-1985, SEC.15.
IC 27-1-6-2
Applicable rights, powers, privileges, duties, obligations, andliabilities
Sec. 2. Any insurance company incorporated as such under thischapter, and its successors shall have the rights and powers, shall beentitled to the privileges, and shall be subject to the duties,obligations, and liabilities as prescribed in this article.
(Formerly: Acts 1935, c.162, s.62.) As amended by P.L.252-1985,SEC.16.
IC 27-1-6-3
Names; required and prohibited words; similarity of names;change of name
Sec. 3. The name of any company organized under this articleshall contain the word "insurance" and the word "company,""corporation" or "incorporated," or shall end with an abbreviation ofone of these words, except that the word "company" or theabbreviation "Co." may be used only if that word or abbreviation isnot immediately preceded by the word "and," or any substitutetherefor.
No company organized under this article shall:
(a) Use as a part of its corporate name the words "United States,""Federal," "government," "official," or any word that would implythat the company was an administrative agency of the state of Indianaor of the United States, or is subject to supervision of any departmentother than the department of insurance of the state of Indiana.
(b) Take or assume a corporate name the same as, or confusinglysimilar to, the name of any other insurance company then existingunder the laws of this state or authorized to transact business in thisstate, unless at the same time (1) such other company shall change itscorporate name or withdraw from transacting business in this state,and (2) the written consent of such company, signed and verifiedunder oath by its secretary, shall be filed with the department.
Any company organized under this article may change its
corporate name at any time by amending its articles of incorporationin the manner hereinafter provided. The provisions of this sectionshall not affect the right of any insurance company which is existingunder the laws of this state on March 8, 1935, or of any suchcompany which thereafter reorganizes or reincorporates under thisarticle or of any company authorized to transact business in this stateon March 8, 1935, to continue the use of its corporate name.
(Formerly: Acts 1935, c.162, s.63.) As amended by Acts 1977,P.L.281, SEC.3; P.L.1-2009, SEC.145.
IC 27-1-6-4
Articles of incorporation; contents
Sec. 4. The incorporators shall execute articles of incorporation,not inconsistent with the provisions of this article, setting forth thefollowing:
(a) The name of the proposed corporation.
(b) The post office address of its principal office.
(c) A precise and accurate statement of the purpose or purposesfor which the company is organized, which shall be restrictedto the kind or kinds of insurance comprised within one (1) ofthe classes of insurance specified in IC 27-1-5-1, and that it isorganized under this article.
(d) The term for which it is to continue as a corporation, whichmay be perpetual.
(e) In the case of a stock company, the amount of its capital andthe aggregate number of shares which the company shall haveauthority to issue and the par value thereof.
(f) The amount of paid-in capital with which the company willbegin business.
(g) The plan or principle upon which the business is to betransacted.
(h) The name, occupation, and post office address of each of theincorporators.
(i) The names of the first officers and directors, their post officeaddresses, and their terms of office.
(j) Any other provisions, consistent with the laws of this state,for the regulation of the business and conduct of the affairs ofthe company and creating, defining, limiting, or regulating thepowers of the company, of the directors, or of the shareholdersor any class or classes of shareholders.
(Formerly: Acts 1935, c.162, s.64.) As amended by P.L.252-1985,SEC.17.
IC 27-1-6-5
Publication of notice of intention to organize
Sec. 5. At least ten (10) and not more than twenty (20) days priorto the presentation of the articles of incorporation to the departmentas provided in section 6 of this chapter, the incorporators shallpublish at least once in a newspaper of general circulation, printedand published in the English language, in the county in which the
principal office of the proposed company is to be located, and at leastonce in a newspaper of general circulation, printed and published inthe English language, in the city of Indianapolis, Marion County,Indiana, a notice of intention to organize such a corporation, whichpublication shall contain the following:
(a) The name of the proposed company.
(b) A statement that the proposed company is to be organizedunder the provisions of this article.
(c) The general character and class or classes of insurance to betransacted by the proposed company.
(d) The time when the articles of incorporation will bepresented to the department.
(e) The names, occupations, and addresses of the incorporators.
(Formerly: Acts 1935, c.162, s.65.) As amended by P.L.252-1985,SEC.18.
IC 27-1-6-6
Articles of incorporation; form; execution
Sec. 6. The form of the articles of incorporation shall beprescribed and furnished by the department. The articles ofincorporation shall be:
(1) prepared and signed in triplicate originals by all of theincorporators, or, in the case of a redomestication underIC 27-1-6.5, by the corporate officers if the originalincorporators are no longer available;
(2) acknowledged by at least three (3) of the incorporators orcorporate officers before a notary public; and
(3) presented in triplicate originals to the department at theoffice of the department.
(Formerly: Acts 1935, c.162, s.66.) As amended by P.L.116-1994,SEC.18.
IC 27-1-6-7
Articles of incorporation; submission to department; proof ofpublication
Sec. 7. At the time of presenting the articles of incorporation forapproval, the incorporators shall file with the department the proofof publication required by section 5 of this chapter. The departmentshall determine whether the proof of publication conforms with theprovisions of section 5 of this chapter and is hereby authorized toapprove or disapprove the same. If the department shall disapprovethe proof of publication, it shall endorse its disapproval thereon andreturn the proof of publication and the articles of incorporation to theincorporators. If the department approves the proof of publication, itshall then consider the articles of incorporation.
(Formerly: Acts 1935, c.162, s.67.) As amended by P.L.252-1985,SEC.19.
IC 27-1-6-8
Articles of incorporation; approval or disapproval by department Sec. 8. The department is hereby authorized, in its discretion, toapprove or disapprove the articles of incorporation of the proposedcompany. If the department shall approve the articles ofincorporation of the proposed company, it shall write or stamp, in anappropriate place on each of said triplicate copies of such articles ofincorporation, the words "Approved by the department of insuranceof the state of Indiana"; and the date of such approval, beneath whichshall appear the impression of the seal of the department and thesignature of the commissioner.
(Formerly: Acts 1935, c.162, s.68.)
IC 27-1-6-9
Articles of incorporation; submission to attorney general
Sec. 9. In the event the department approves the articles ofincorporation of the proposed company, it shall then submit theproposed articles of incorporation to the attorney general for the stateof Indiana, who shall examine said articles. If the attorney generalfinds that the articles of incorporation conform to the provisions ofthis article and are not inconsistent with the constitution of this state,and of the United States, he shall so certify and shall thereuponreturn the articles of incorporation to the department with hisapproval endorsed thereon.
(Formerly: Acts 1935, c.162, s.69.) As amended by P.L.252-1985,SEC.20.
IC 27-1-6-10
Articles of incorporation; submission to secretary of state; filing
Sec. 10. When the articles of incorporation have been approvedby the attorney-general and returned to the department, then thedepartment shall present the same to the secretary of state for thestate of Indiana. If the secretary of state finds that the articles ofincorporation conform to law, he shall indorse his approval uponeach of the triplicate copies of the articles, and when all fees havebeen paid as required by law, he shall file one (1) copy in his officeand return the other two (2) copies to the incorporators or theirrepresentatives.
(Formerly: Acts 1935, c.162, s.70.)
IC 27-1-6-11
Articles of incorporation; filing certified copy with department;surety bond; permit for completion of organization; procedure
Sec. 11. (a) When the articles of incorporation are returned to theincorporators or their representatives bearing the endorsement of theapproval of the secretary of state, as provided in section 10 of thischapter, the incorporators or their representatives shall obtain acertified copy of the articles of incorporation from the secretary ofstate and file such certified copy with the department.
(b) The incorporators shall also file with the department a suretybond payable to the state of Indiana in the sum of ten thousanddollars ($10,000), with surety to be approved by the commissioner
or collateral in the sum of ten thousand dollars ($10,000), asapproved by the commissioner, and conditioned upon the faithfulaccounting to the department on completion of organization andreceipt of its certificate of authority from the department, or to itsshareholders, members, applicants for policies and creditors, or thetrustee, receiver, or assignee of the proposed company dulyappointed in any proceedings in any court of competent jurisdictionin the state in accordance with their respective rights in case theorganization of the proposed company should not be completed anda certificate of authority should not be procured from the department.
(c) Whenever the incorporators have filed their certified copy ofthe articles of incorporation and bond as provided in this section,then the department may issue a permit for completion oforganization. The company shall have authority under such permit tosolicit subscriptions and payments for capital stock, if a stockcompany, and applications and advance premiums for insurance, ifa mutual company, and to exercise such powers, subject to thelimitations in this article prescribed, as may be necessary and properin completing its organization and qualifying itself for a certificateof authority from the department to make the kind or kinds ofinsurance proposed in its articles of incorporation, provided that suchcompany shall not issue policies or enter into contracts of insuranceuntil it shall have received the certificate of the departmentauthorizing it so to do.
(Formerly: Acts 1935, c.162, s.71.) As amended by P.L.252-1985,SEC.21.
IC 27-1-6-12
Commencement of corporate existence; powers
Sec. 12. Upon the issuance of the permit for completion oforganization by the department, the corporate existence shall begin,and thereupon such incorporators and their associates shall becomea body corporate with power to sue and be sued, contract and becontracted with, adopt a seal, and do such other acts, subject to theprovisions and to the restrictions of this article, as shall be needful toaccomplish the purpose of completing its organization, provided, thatsuch company shall not issue policies or enter into contracts ofinsurance until it shall have received the certificate of the departmentauthorizing it so to do.
(Formerly: Acts 1935, c.162, s.72.) As amended by P.L.252-1985,SEC.22.
IC 27-1-6-13
Requirements for commencing business or incurring indebtedness;liability for violations
Sec. 13. Any company organized under this article shall nottransact any business or incur any indebtedness until:
(a) one (1) of the triplicate copies of the articles ofincorporation, bearing the approval of the department and theattorney general and the endorsement of the approval of the
secretary of state, as provided in section 10 of this chapter hasbeen filed for record with the county recorder of the county inwhich the principal office is located; and
(b) a certified copy of the permit for completion oforganization, issued pursuant to section 11 of this chapter, shallbe filed for record with the county recorder of the county inwhich the principal office is located, which certified copy shallbe evidence only that the company has been authorized toproceed in the completion of its organization.
If a company transacts any business or incurs any indebtedness inviolation of this section, the officers who participated therein and thedirectors, except those who dissented therefrom and caused theirdissent to be filed at the time in the principal office of the companyor who, being absent, filed their dissent upon learning of the action,shall be severally liable for the debts or liabilities of the company soincurred or arising therefrom.
(Formerly: Acts 1935, c.162, s.73.) As amended by P.L.252-1985,SEC.23.
IC 27-1-6-14
Stock companies; capital stock and surplus requirements
Sec. 14. (a) A domestic capital stock company that organizedbefore March 7, 1967, must maintain a paid-in capital stock of notless than:
(1) two hundred thousand dollars ($200,000), if it markets one(1) or more kinds of insurance under Class I;
(2) two hundred thousand dollars ($200,000), if it markets one(1) kind of insurance under Class II, other than Class II(k)insurance;
(3) three hundred thousand dollars ($300,000), if it markets two(2) kinds of insurance under Class II, other than Class II(k)insurance;
(4) four hundred thousand dollars ($400,000), if it markets three(3) or more kinds of insurance under Class II, other than ClassII(k) insurance;
(5) four hundred thousand dollars ($400,000), if it markets one(1) or more kinds of insurance under Class III;
(6) seven hundred fifty thousand dollars ($750,000), if itmarkets one (1) or more kinds of insurance under both Class IIand Class III; or
(7) seven hundred fifty thousand dollars ($750,000), if itmarkets one (1) or more kinds of insurance under Class II,including Class II(k) insurance.
(b) A domestic capital stock company that organized after March6, 1967, and before July 1, 1977, must maintain a paid-in capitalstock of not less than:
(1) four hundred thousand dollars ($400,000), if it markets one(1) or more kinds of insurance under Class I;
(2) four hundred thousand dollars ($400,000), if it markets one(1) or more kinds of insurance under Class II, other than Class
II(k) insurance;
(3) four hundred thousand dollars ($400,000), if it markets one(1) or more kinds of insurance under Class III;
(4) seven hundred fifty thousand dollars ($750,000), if itmarkets one (1) or more kinds of insurance under both Class IIand Class III; or
(5) seven hundred fifty thousand dollars ($750,000), if itmarkets one (1) or more kinds of insurance under Class II,including Class II(k) insurance.
(c) A domestic capital stock company that organized after June30, 1977, must maintain a paid-in capital stock of not less than onemillion dollars ($1,000,000).
(d) A domestic capital stock company must deposit with thedepartment the following percentage of its paid-in capital stockrequirement under this section in cash or in obligations of the UnitedStates:
(1) Twenty-five percent (25%), if it organized before July 1,1977.
(2) Ten percent (10%), if it organized after June 30, 1977.
(e) A domestic capital stock company must maintain a surplus ofnot less than two hundred fifty thousand dollars ($250,000).However, when it organizes, it must have a surplus of not less thanone million dollars ($1,000,000).
(f) If the commissioner determines that the continued operation ofa domestic capital stock company may be hazardous to thepolicyholders or the general public, the commissioner may, upon thecommissioner's determination, issue an order requiring the insurer toincrease the insurer's capital and surplus based on the type, volume,and nature of the business transacted.
(Formerly: Acts 1935, c.162, s.74; Acts 1955, c.316, s.1; Acts 1959,c.13, s.1; Acts 1967, c.127, s.2.) As amended by Acts 1977, P.L.282,SEC.1; Acts 1980, P.L.169, SEC.1; P.L.130-1994, SEC.14;P.L.116-1994, SEC.19.
IC 27-1-6-15
Mutual companies; initial subscriptions and premiums; deposits;surplus
Sec. 15. (a) Except as provided in subsection (b), a domesticmutual company that organized before July 1, 1977, must maintaina surplus of not less than two hundred fifty thousand dollars($250,000). This subsection does not apply to a standard farm mutualinsurance company that is organized under IC 27-5 (before its repeal)or IC 27-5.1.
(b) A domestic mutual company that organized before July 1,1977, must maintain a surplus of not less than:
(1) seven hundred fifty thousand dollars ($750,000), if itmarkets one (1) or more kinds of insurance under both Class IIand Class III, other than Class II(k) insurance;
(2) one million dollars ($1,000,000), if it markets one (1) ormore kinds of insurance under Class II, including Class II(k)
insurance; or
(3) one million dollars ($1,000,000), if it markets one (1) ormore kinds of insurance under both Class II and Class III,including Class II(k) insurance.
(c) A domestic mutual company that organized after June 30,1977, must maintain a surplus of not less than one million twohundred fifty thousand dollars ($1,250,000). However, when itorganizes, it must:
(1) have a surplus of not less than two million dollars($2,000,000);
(2) for the one (1) or more kinds of insurance under Class I thatit intends to market, have received applications for insurancefrom not less than four hundred (400) persons, each applicationfor an amount not less than one thousand dollars ($1,000), andhave received the first year's premium due on a policy to beissued on each such application; and
(3) for the one (1) or more kinds of insurance under Class II orClass III that it intends to market, have received applications forinsurance covering not less than eight hundred (800) separaterisks in not less than forty (40) policies to be issued to not lessthan forty (40) members, and have received premiumsamounting to not less than one hundred thousand dollars($100,000) for those policies.
(d) A domestic mutual company must deposit with the departmentin cash or in obligations of the United States:
(1) twenty-five thousand dollars ($25,000), if it organizedbefore June 30, 1955;
(2) fifty thousand dollars ($50,000), if it organized after June29, 1955, and before March 7, 1967; or
(3) one hundred thousand dollars ($100,000), if it organizedafter March 6, 1967.
This subsection does not apply to a standard farm mutual insurancecompany that is organized under IC 27-5 (before its repeal) orIC 27-5.1.
(e) If the commissioner determines that the continued operationof a domestic mutual company may be hazardous to thepolicyholders or the general public, the commissioner may, upon thecommissioner's determination, issue an order requiring the insurer toincrease the insurer's capital and surplus based on the type, volume,and nature of the business transacted.
(Formerly: Acts 1935, c.162, s.75; Acts 1955, c.316, s.2; Acts 1967,c.127, s.3.) As amended by Acts 1977, P.L.282, SEC.2;P.L.130-1994, SEC.15; P.L.116-1994, SEC.20; P.L.129-2003,SEC.1.
IC 27-1-6-16
Extension of charter powers and licenses; limitation of actions
Sec. 16. (a) The charter powers and licenses of any domesticinsurers authorized to market one or more kinds of insurance orreinsurance under Class II or Class III and meeting the requirements
set out in section 14 or 15 of this chapter may be broadened andextended hereunder to include the right, power and authority to makeany one or more of the kinds of insurance and reinsurance specifiedin both Class II and Class III of IC 27-1-5-1.
(b) Any domestic company authorized to insure against loss ordamage by fire, which has been actively engaged in the fire insurancebusiness continuously for ten (10) years or more, or whosepredecessor or predecessors, if any prior to merger or consolidation,shall have been so engaged for such period, may, if it complies withthe provisions of this subsection and without complying with thecapitalization and surplus requirements of section 14 or section 15 ofthis chapter, insure against loss or damage to dwellings andappurtenant structures and to the contents thereof and any otherpersonal property of a similar nature of the insured or of themembers of his household, resulting from any peril, and may, inconnection with making such insurance, also make insurance againstthe legal liability of the insured or of the members of his household,and for any medical, surgical and hospital expenses of any personother than the insured or such members, arising out of nonbusinesspursuits of the insured or such members or out of the condition of, oracts performed by the insured or such members on such dwellingsand appurtenant structures and the real estate on which each islocated. Where a company is entitled to make such additionalinsurance solely by virtue of this subsection, it shall not make suchinsurance unless it has made reinsurance arrangements satisfactoryto the commissioner whereby all of such additional insurance isreinsured with a company which is qualified under IC 27-1 to makereinsurance of such additional kind of insurance. The charter powersand licenses of any domestic insurer meeting the requirements set outin this subsection may be broadened and extended hereunder toinclude the right, power and authority to make any one or more of thekinds of insurance permitted by this subsection.
(c) No policy issued by a mutual company including a farmmutual insurance company, shall be required to contain a provisionlimiting the time within which suit against the insurer on such policymust be filed.
(Formerly: Acts 1935, c.162, s.75 1/2; Acts 1947, c.50, s.1; Acts1957, c.265, s.2; Acts 1967, c.233, s.2.) As amended by Acts 1977,P.L.282, SEC.3; P.L.129-2003, SEC.2.
IC 27-1-6-17
Examination of proposed companies; revocation and renewal ofpermit and insurance producer's authority
Sec. 17. The commissioner may, personally or through thecommissioner's deputies and assistants, examine into the affairs ofany such proposed company and inspect its books and papers, andmay summon and examine under oath any officer or insuranceproducer or any person who is or has been connected with suchcompany, and if the commissioner finds the company is violating thelaw, or if the company shall not be qualified for a certificate of
authority within one (1) year from date of its permit, thecommissioner may revoke its permit; and if the commissioner findsan insurance producer of such company has violated the law, thecommissioner may revoke the insurance producer's authority, and thecommissioner may for the insurance producer's violation revoke thecompany's permit. Any revocation shall be after notice and hearing.The commissioner may renew any company's permit or agent'sauthority which the commissioner has revoked.
(Formerly: Acts 1935, c.162, s.76.) As amended by P.L.178-2003,SEC.14.
IC 27-1-6-18
Certificate of authority; issuance; recording
Sec. 18. When the provisions of sections 2 through 17 of thischapter have been complied with, and the department has made aninvestigation and examination as required in section 17, then thecommissioner may issue a certificate of authority underIC 27-1-3-20, which shall license the company to transact only thekind or kinds of insurance specified in its articles of incorporation.The company shall file a certified copy of such certificate ofauthority for record with the county recorder of the county whereinthe principal office is located, which certified copy shall be evidenceonly that the company is authorized and licensed to transact the classor classes of insurance set out therein.
(Formerly: Acts 1935, c.162, s.77.) As amended by Acts 1977,P.L.283, SEC.1.
IC 27-1-6-19
Bylaws; procedure for adoption
Sec. 19. (a) If the articles of incorporation provide for theadoption of the bylaws by the shareholders, members, orpolicyholders, the incorporators or a majority of them after theissuance of the certificate of authority, shall call a meeting of theshareholders, members, or policyholders for the purpose of adoptingthe bylaws, giving at least ten (10) days' notice by mail to eachshareholder, member, or policyholder entitled to vote at the time andplace of such meeting, unless the giving of such notice be waived inwriting by any or all of such shareholders, members, orpolicyholders, in which case notice shall be given only to suchshareholders, members, or policyholders who have not so waivedsuch notice. Such shareholders, members, or policyholders shall meetat the time and place designated and shall adopt the bylaws. After theadoption of such bylaws, the directors named in the articles ofincorporation as the first board of directors shall meet at the call ofa majority thereof and shall elect officers and transact such otherbusiness as may properly come before such board.
(b) If the articles of incorporation do not provide for the adoptionof the bylaws by the shareholders, members, or policyholders, then,after the issuance of the certificate of authority, the directors namedin the articles as the first board of directors shall meet at the call of
a majority thereof, adopt the bylaws, elect officers, and transact suchother business as may properly come before such board.
(Formerly: Acts 1935, c.162, s.78.) As amended by P.L.252-1985,SEC.24.
IC 27-1-6-20
Repealed
(Repealed by P.L.108-1985, SEC.1.)
IC 27-1-6-21
Company domiciled in Indiana; requirements
Sec. 21. (a) A company that is approved by the department afterJune 30, 2000, to be domiciled in Indiana, must have and maintain inIndiana the following:
(1) A physical presence that provides economic benefit to thestate.
(2) Complete records of the company's assets, transactions, andaffairs in accordance with methods and systems that arecustomary or suitable to the kind or kinds of insurancetransacted by the company, including all records required underIC 27-1-7-16. Records may be maintained in a form that isphysically or electronically available to the department withinIndiana.
(b) The commissioner shall determine whether the requirementsof subsection (a) are met. In making a determination undersubsection (a)(1), the commissioner shall compare and consider thefollowing:
(1) The economic benefit to Indiana and Indiana communitiesoffered by the domestication of the company.
(2) The costs that may be incurred by the state in regulating thecompany as a domestic company versus a foreign company.
(c) If a domestic company subject to this section fails to complywith the provisions of subsection (a), the commissioner may:
(1) require the company to transfer its domicile underIC 27-1-6.5-2; or
(2) annually impose an additional administrative fee on thecompany in an amount equal to the difference between the costof regulating the company as a domestic company and the costof regulating the company as a foreign company. The fee shallbe deposited in the department of insurance fund established byIC 27-1-3-28.
(d) In the case of a company that is part of an insurance holdingcompany system (as defined in IC 27-1-23-1) whose presenceprovides an economic benefit to the state, the commissioner shallconsider the insurance holding company system and any domesticcompany in the aggregate when making the determination requiredunder subsection (b).
As added by P.L.144-2000, SEC.1.