CHAPTER 8. REGULATION
IC 27-11-8
Chapter 8. Regulation
IC 27-11-8-1
Standards for valuation of certificates; maintenance of excessreserves on certificates
Sec. 1. (a) Standards of valuation for certificates issued beforeJanuary 1, 1987, shall be those provided by the laws applicable onDecember 31, 1985.
(b) The minimum standards of valuation for certificates issuedafter December 31, 1986, shall be based on the following tables:
(1) For certificates of life insurance.the Commissioner's 1941Standard Ordinary Mortality Table, the Commissioner's 1941Standard Industrial Mortality Table, the Commissioner's 1958Standard Ordinary Mortality Table, the Commissioner's 1980Standard Ordinary Mortality Table, or any more recent tablemade applicable to life insurers.
(2) For annuity and pure endowment certificates, total andpermanent disability benefits, accidental death benefits, andnoncancellable accident and health benefits.such tables as areauthorized for use by life insurers in this state.
(c) All of the above shall be under valuation methods andstandards (including interest assumptions) in accordance with thelaws of this state applicable to life insurers issuing policiescontaining like benefits.
(d) The commissioner may accept other standards for valuation ifthe commissioner finds that the reserves produced will not be less inthe aggregate than reserves computed in accordance with theminimum valuation standard prescribed in this section. Thecommissioner may vary the standards of mortality applicable to allbenefit contracts on substandard lives or other extra hazardous livesby any society authorized to do business in this state.
(e) Any society, with the consent of the commissioner of the stateof domicile of the society and under the conditions, if any, that thecommissioner may impose, may establish and maintain reserves onits certificates in excess of the reserves required thereunder, but thecontractual rights of any benefit member shall not be affectedthereby.
As added by P.L.262-1985, SEC.1.
IC 27-11-8-2
Annual financial statement
Sec. 2. (a) Reports shall be filed in accordance with this section.
(b) Every society transacting business in this state shall annually,before March 1, unless for cause shown the time has been extendedby the commissioner, file with the commissioner a true statement ofits financial condition, transactions, and affairs for the precedingcalendar year and pay a fee of twenty-five dollars ($25) for filing thestatement. The statement shall be in general form and context asapproved by the National Association of Insurance Commissioners
for fraternal benefit societies and as supplemented by additionalinformation required by the commissioner.
(c) As part of the annual statement required in this section, eachsociety shall, before March 1, file with the commissioner a valuationof its certificates in force on December 31 last preceding, providedthe commissioner may for cause shown, extend the time for filing thevaluation for not more than two (2) calendar months. The valuationshall be done in accordance with the standards specified in section1 of this chapter. The valuation and underlying data shall be certifiedby a qualified actuary or, at the expense of the society, verified bythe actuary of the department of insurance of the state of domicile ofthe society.
(d) A society neglecting to file the annual statement in the formand within the time provided by this section shall forfeit one hundreddollars ($100) for each day during which the neglect continues, and,upon notice by the commissioner to that effect, its authority to dobusiness in Indiana shall cease while the default continues.
As added by P.L.262-1985, SEC.1. Amended by P.L.31-1988,SEC.24.
IC 27-11-8-3
Renewal of license; fee
Sec. 3. The authority of all societies licensed may be renewedannually, but in all cases to terminate on April 30. However, alicense shall continue in full force and effect until the new license isissued or specifically refused. For each license or renewal, thesociety shall pay the commissioner a fee of twenty-five dollars ($25).A duly certified copy or duplicate of the license is prima facieevidence that the licensee is a fraternal benefit society within themeaning of this article.
As added by P.L.262-1985, SEC.1. Amended by P.L.31-1988,SEC.25.
IC 27-11-8-4
Examination of societies transacting or applying for admission totransact business in Indiana; expenses
Sec. 4. (a) The commissioner or any person the commissioner mayappoint may examine any domestic, foreign, or alien societytransacting or applying for admission to transact business in Indianain the same manner as authorized for examination of domestic,foreign, or alien insurers. Requirements of notice and an opportunityto respond before findings are made public as provided in the lawsregulating insurers shall also be applicable to the examination ofsocieties.
(b) The expense of each examination and of each valuation,including compensation and actual expense of examiners, shall bepaid by the society examined or whose certificates are valued, uponstatements furnished by the commissioner.
As added by P.L.262-1985, SEC.1.
IC 27-11-8-5
Requirements for issuance of license to transact business inIndiana
Sec. 5. No foreign or alien society shall transact business inIndiana without a license issued by the commissioner. Any societydesiring admission to Indiana shall comply substantially with therequirements and limitations of this article applicable to domesticsocieties. Any society may be licensed to transact business in Indianaupon filing with the commissioner:
(1) a certified copy of its articles of incorporation;
(2) a copy of its bylaws, certified by its secretary orcorresponding officer;
(3) a power of attorney to the commissioner as prescribed inIC 27-11-9-1;
(4) a statement of its business under oath of its president andsecretary or corresponding officers in a form prescribed by thecommissioner, verified by an examination made by thesupervising insurance official of its home state or other state,territory, province, or country and satisfactory to thecommissioner;
(5) certification from the proper official of its home state,territory, province, or country that the society is legallyincorporated and licensed to transact business therein;
(6) copies of its certificate forms; and
(7) such other information as the commissioner considersnecessary;
and upon a showing that its assets are invested in accordance withthis chapter.
As added by P.L.262-1985, SEC.1.
IC 27-11-8-6
Noncompliance with limitations on transaction of business;injunction; hearing; liquidation of society; receivership; voluntarydetermination to discontinue business
Sec. 6. (a) When the commissioner upon investigation finds thata domestic society:
(1) has exceeded its powers;
(2) has failed to comply with this chapter;
(3) is not fulfilling its contracts in good faith;
(4) has a membership of less than four hundred (400) after anexistence of one (1) year or more; or
(5) is conducting business fraudulently or in a mannerhazardous to its members, creditors, the public, or the business;
the commissioner shall in writing notify the society of the deficiencyor deficiencies, state the reasons for the commissioner'sdissatisfaction, and require that the deficiency or deficiencies thatexist be corrected. After notice, the society shall have thirty (30)days in which to comply with the commissioner's request forcorrection, and, if the society fails to comply, the commissioner shallnotify the society of the findings of noncompliance and require the
society to show cause on a date named why it should not be enjoinedfrom carrying on any business until the violation complained of shallhave been corrected, or why an action in quo warranto should not becommenced against the society.
(b) If on that date the society does not present good and sufficientreasons why it should not be enjoined or why action should not becommenced, the commissioner may present the facts relating theretoto the attorney general who shall, if the attorney general considersthe circumstances warrant, commence an action to enjoin the societyfrom transacting business or in quo warranto.
(c) The court shall notify the officers of the society of a hearing.If after a full hearing it appears that the society should be enjoinedor liquidated or a receiver appointed, the court shall enter thenecessary order. No society so enjoined shall have the authority to dobusiness until:
(1) the commissioner finds that the violation complained of hasbeen corrected;
(2) the costs of the action have been paid by the society if thecourt finds that the society was in default as charged;
(3) the court has dissolved its injunction; and
(4) the commissioner has reinstated the certificate of authority.
(d) If the court orders the society liquidated, it shall be enjoinedfrom carrying on any further business, whereupon the receiver of thesociety shall proceed at once to take possession of the books, papers,money, and other assets of the society and, under the direction of thecourt, proceed to close the affairs of the society and to distribute itsfunds to those entitled to the funds.
(e) No action under this section shall be recognized in any courtof this state unless brought by the attorney general upon request ofthe commissioner. Whenever a receiver is to be appointed for adomestic society, the court shall appoint the commissioner as thereceiver.
(f) The provisions of this section relating to hearing by thecommissioner, action by the attorney general at the request of thecommissioner, hearing by the court, injunction, and receivershipshall be applicable to a society that shall voluntarily determine todiscontinue business.
As added by P.L.262-1985, SEC.1.
IC 27-11-8-7
Noncompliance by foreign or alien society; suspension, revocation,or refusal of license
Sec. 7. (a) When the commissioner upon investigation finds thata foreign or alien society transacting or applying to transact businessin Indiana:
(1) has exceeded its powers;
(2) has failed to comply with any of the provisions of thischapter;
(3) is not fulfilling its contracts in good faith; or
(4) is conducting its business fraudulently or in a manner
hazardous to its members or creditors or the public;
the commissioner shall in writing notify the society of the deficiencyor deficiencies, state the reasons for the commissioner'sdissatisfaction, and require that the deficiency or deficiencies thatexist be corrected.
(b) After the notice, the society shall have thirty (30) days inwhich to comply with the commissioner's request for correction, and,if the society fails to comply, the commissioner shall notify thesociety of the findings of noncompliance and require the society toshow cause on a date named why its license should not be suspended,revoked, or refused. If on that date the society does not present goodand sufficient reason why its authority to do business in Indianashould not be suspended, revoked, or refused, the commissioner maysuspend or refuse the license of the society to do business in Indianauntil satisfactory evidence is furnished to the commissioner that thesuspension or refusal should be withdrawn, or the commissioner mayrevoke the authority of the society to do business in Indiana.
(c) Nothing contained in this section shall be taken or construedas preventing any society from continuing in good faith all contractsmade in Indiana during the time the society was legally authorized totransact business in Indiana.
As added by P.L.262-1985, SEC.1.
IC 27-11-8-8
Application or petition for injunction
Sec. 8. No application or petition for injunction against anydomestic, foreign, or alien society, or lodge shall be recognized inany court of Indiana unless made by the attorney general uponrequest of the commissioner.
As added by P.L.262-1985, SEC.1.
IC 27-11-8-9
Licensing of insurance producers of societies
Sec. 9. (a) Insurance producers of societies shall be licensed inaccordance with the laws regulating the licensing and the revocation,suspension, or termination of license of resident and nonresidentinsurance producers.
(b) No examination or license shall be required of any regularsalaried officer, employee, or member of a licensed society whodevotes substantially all of the officer's, employee's or member'sservices to activities other than the solicitation of fraternal insurancecontracts from the public and who receives for the solicitation ofthose contracts no commission or other compensation directlydependent upon the amount of business obtained.
As added by P.L.262-1985, SEC.1. Amended by P.L.178-2003,SEC.83.
IC 27-11-8-10
Unfair competition; unfair or deceptive acts or practices
Sec. 10. Every society authorized to do business in Indiana shall
be subject to IC 27-4-1 relating to unfair methods of competition andunfair or deceptive acts or practices, provided that nothing in thoseprovisions shall be construed as applying to or affecting the right ofany society to determine its eligibility requirements for membershipor be construed as applying to or affecting the offering of benefitsexclusively to members or persons eligible for membership in thesociety by a subsidiary corporation or affiliated organization of thesociety.
As added by P.L.262-1985, SEC.1.