CHAPTER 5. UNAUTHORIZED INSURERS ACT

IC 27-4-5
    Chapter 5. Unauthorized Insurers Act

IC 27-4-5-1
Purpose; legislative declaration
    Sec. 1. The purpose of this chapter is to subject certain insurersto the jurisdiction of the insurance commissioner and the courts ofthis state in suits by or on behalf of the state. The general assemblydeclares that it is concerned with the protection of residents of thisstate against acts by insurers not authorized to do an insurancebusiness in this state, by the maintenance of fair and honest insurancemarkets, by protecting authorized insurers which are subject toregulation from unfair competition by unauthorized insurers, and byprotecting against the evasion of the insurance regulatory laws of thisstate. In furtherance of such state interest, the general assemblyprovides methods in this chapter for substituted service of processupon such insurers in any proceeding, suit, or action in any court andsubstituted service of any notice, order, pleading, or process uponsuch insurers in any proceeding by the commissioner of insurance toenforce or effect full compliance with this title. In so doing, the stateexercises its powers to protect residents of this state and to definewhat constitutes transacting an insurance business in this state, andalso exercises powers and privileges available to this state by virtueof 15 U.S.C. 1011 through 1015, as amended, which declares that thebusiness of insurance and every person engaged therein shall besubject to the laws of the several states.
(Formerly: Acts 1969, c.194, s.1.) As amended by P.L.252-1985,SEC.165.

IC 27-4-5-2
Prohibition of unauthorized insurance business; exceptions;business by mail; venue; validity of contract; right to defend;prerequisites to action
    Sec. 2. (a) It is a Class A infraction for an insurer to transactinsurance business in this state, as set forth in subsection (b), withouta certificate of authority from the commissioner. However, thissection does not apply to the following:
        (1) The lawful transaction of surplus lines insurance.
        (2) The lawful transaction of reinsurance by insurers.
        (3) Transactions in this state involving a policy lawfullysolicited, written, and delivered outside of this state coveringonly subjects of insurance not resident, located, or expressly tobe performed in this state at the time of issuance, and whichtransactions are subsequent to the issuance of such policy.
        (4) Attorneys acting in the ordinary relation of attorney andclient in the adjustment of claims or losses.
        (5) Transactions in this state involving group life and groupsickness and accident or blanket sickness and accidentinsurance or group annuities where the master policy of suchgroups was lawfully issued and delivered in and pursuant to the

laws of a state in which the insurer was authorized to do aninsurance business, to a group organized for purposes other thanthe procurement of insurance, and where the policyholder isdomiciled or otherwise has a bona fide situs.
        (6) Transactions in this state relative to a policy issued or to beissued outside this state involving insurance on vessels, craft orhulls, cargos, marine builder's risk, marine protection andindemnity or other risk, including strikes and war riskscommonly insured under ocean or wet marine forms of policy.
        (7) Transactions in this state involving life insurance, healthinsurance, or annuities provided to religious or charitableinstitutions organized and operated without profit to any privateshareholder or individual for the benefit of such institutions andindividuals engaged in the service of such institutions.
        (8) Transactions in this state involving contracts of insurancenot readily obtainable in the ordinary insurance market andissued to one (1) or more industrial insureds. For purposes ofthis section, an "industrial insured" means an insured:
            (A) who procures the insurance of any risk or risks by use ofthe services of a full-time employee acting as an insurancemanager or buyer or the services of a regularly retained andcontinuously qualified insurance consultant;
            (B) whose aggregate annual premium for insurance on allrisks totals at least twenty-five thousand dollars ($25,000);and
            (C) who has at least twenty-five (25) full-time employees.
        (9) Transactions in Indiana involving the rendering of anyservice by any ambulance service provider and all fees, costs,and membership payments charged for the service. To qualifyunder this subdivision, the ambulance service provider:
            (A) must have its ambulance service program approved byan ordinance of the legislative body of the county or city inwhich it operates; and
            (B) may not offer any membership program that includesbenefits exceeding one (1) year in duration.
    (b) Any of the following acts in this state effected by mail orotherwise by or on behalf of an unauthorized insurer constitutes thetransaction of an insurance business in this state. The venue of an actcommitted by mail is at the point where the matter transmitted bymail is delivered and takes effect. Unless otherwise indicated, theterm "insurer" as used in this section includes all persons engaged asprincipals in the business of insurance and also includesinterinsurance exchanges and mutual benefit societies.
        (1) The making of or proposing to make, as an insurer, aninsurance contract.
        (2) The making of or proposing to make, as guarantor or surety,any contract of guaranty or suretyship as a vocation and notmerely incidental to any other legitimate business or activity ofthe guarantor or surety.
        (3) The taking or receiving of any application for insurance.        (4) The receiving or collection of any premium, commission,membership fees, assessments, dues, or other consideration forany insurance or any part thereof.
        (5) The issuance or delivery of contracts of insurance toresidents of this state or to persons authorized to do business inthis state.
        (6) Acting as an agent for or otherwise representing or aiding onbehalf of another person or insurer in the solicitation,negotiation, procurement, or effectuation of insurance orrenewals thereof or in the dissemination of information as tocoverage or rates, or forwarding of applications, or delivery ofpolicies or contracts, or inspection of risks, a fixing of rates orinvestigation or adjustment of claims or losses or in thetransaction of matters subsequent to effectuation of the contractand arising out of it, or representing or assisting a person or aninsurer in the transaction of insurance with respect to subjectsof insurance resident, located, or to be performed in this state.This subdivision does not prohibit full-time salaried employeesof a corporate insured from acting in the capacity of aninsurance manager or buyer in placing insurance in behalf of theemployer.
    (c)(1) The failure of an insurer transacting insurance business inthis state to obtain a certificate of authority does not impair thevalidity of any act or contract of such insurer and does not preventsuch insurer from defending any action at law or suit in equity in anycourt of this state, but no insurer transacting insurance business inthis state without a certificate of authority may maintain an action inany court of this state to enforce any right, claim, or demand arisingout of the transaction of such business until such insurer obtains acertificate of authority.
    (2) In the event of failure of any such unauthorized insurer to payany claim or loss within the provisions of such insurance contract,any person who assisted or in any manner aided directly or indirectlyin the procurement of such insurance contract is liable to the insuredfor the full amount of the claim or loss in the manner provided by theinsurance contract.
(Formerly: Acts 1969, c.194, s.2.) As amended by Acts 1978, P.L.2,SEC.2720; P.L.161-1988, SEC.1; P.L.130-1994, SEC.39;P.L.116-1994, SEC.51; P.L.252-1995, SEC.2.

IC 27-4-5-3
Injunction
    Sec. 3. Whenever the commissioner believes, from evidencesatisfactory to the commissioner, that any insurer is violating orabout to violate the provisions of section 2 of this chapter, thecommissioner may cause a complaint to be filed in the circuit orsuperior court to enjoin and restrain such insurer from continuingsuch violation or engaging therein or doing any act in furtherancethereof. The court shall have jurisdiction of the proceeding and shallhave the power to make and enter an order or judgment awarding

such preliminary or final injunctive relief as in its judgment isproper.
(Formerly: Acts 1969, c.194, s.3.) As amended by P.L.252-1985,SEC.166; P.L.255-1995, SEC.5.

IC 27-4-5-4
Appointment of attorney for service of process; method of service
    Sec. 4. (a) Any act of transacting an insurance business as setforth in section 2 of this chapter by any unauthorized insurer isequivalent to and shall constitute an irrevocable appointment by suchinsurer, binding upon him, his executor or administrator, or successorin interest if a corporation, of the secretary of state or his successorin office, to be the true and lawful attorney of such insurer uponwhom may be served all lawful process in any action, suit, orproceeding in any court by the commissioner of insurance or by thestate and upon whom may be served any notice, order, pleading, orprocess in any proceeding before the commissioner of insurance andwhich arises out of transacting an insurance business in this state bysuch insurer. Any act of transacting an insurance business in thisstate by any unauthorized insurer shall be signification of itsagreement that any such lawful process in such court action, suit, orproceeding and any such notice, order, pleading, or process in suchadministrative proceeding before the commissioner of insurance soserved shall be of the same legal force and validity as personalservice of process in this state upon such insurer.
    (b) Service of process in such action shall be made by deliveringto and leaving with the secretary of state, or some person in apparentcharge of his office, two (2) copies thereof and by payment to thesecretary of state of the fee prescribed by law. Service upon thesecretary of state as such attorney shall be service upon the principal.
    (c) The secretary of state shall forthwith forward by certified mailone (1) of the copies of such process or such notice, order, pleading,or process in proceedings before the commissioner to the defendantin such court proceeding or to whom the notice, order, pleading, orprocess in such administrative proceeding is addressed or directed atits last known principal place of business and shall keep a record ofall process so served on him which shall show the day and hour ofservice. Such service is sufficient, provided:
        (1) notice of such service and a copy of the court process or thenotice, order, pleading, or process in such administrativeproceeding are sent within ten (10) days thereafter by certifiedmail by the plaintiff or the plaintiff's attorney in the courtproceeding or by the commissioner of insurance in theadministrative proceeding to the defendant in the courtproceeding or to whom the notice, order, pleading, or processin such administrative proceeding is addressed or directed at thelast known place of business of the defendant in the court oradministrative proceeding; and
        (2) the defendant's receipt or receipts issued by the post officewith which the letter is registered, showing the name of the

sender of the letter and the name and address of the person orinsurer to whom the letter is addressed, and an affidavit of theplaintiff or the plaintiff's attorney in court proceeding or of thecommissioner of insurance in administrative proceeding,showing compliance therewith are filed with the clerk of thecourt in which such action, suit, or proceeding is pending orwith the commissioner in administrative proceedings, on orbefore the date the defendant in the court or administrativeproceeding is required to appear or respond thereto, or withinsuch further time as the court or commissioner of insurance mayallow.
    (d) No plaintiff shall be entitled to a judgment or a determinationby default in any court or administrative proceeding in which courtprocess or notice, order, pleading, or process in proceedings beforethe commissioner of insurance is served under this section until theexpiration of forty-five (45) days from the date of filing of theaffidavit of compliance.
    (e) Nothing in this section shall limit or affect the right to serveany process, notice, order, or demand upon any person or insurer inany other manner permitted by law.
(Formerly: Acts 1969, c.194, s.4; Acts 1971, P.L.1, SEC.10.) Asamended by P.L.252-1985, SEC.167.

IC 27-4-5-5
Prerequisites to pleading; deposit to secure payment of judgment;procuring certificate of authority; motion to quash
    Sec. 5. (a) Before any unauthorized insurer files or causes to befiled in any pleading in any court action, suit, or proceeding or in anynotice, order, pleading, or process in such administrative proceedingbefore the commissioner instituted against such person or insurer, byservices made as provided in section 4 of this chapter, such insurershall either:
        (1) deposit with the clerk in which such action, suit, orproceeding is pending, or with the commissioner of insurancein administrative proceedings before the commissioner, cash orsecurities, or file with such clerk or commissioner a bond withgood and sufficient sureties, to be approved by the clerk orcommissioner in an amount to be fixed by the court orcommissioner sufficient to secure the payment of any finaljudgment which may be rendered in such action oradministrative proceeding; or
        (2) procure a certificate of authority to transact the business ofinsurance in this state.
In considering the application of an insurer for a certificate ofauthority, for the purposes of this section the commissioner need notassert the provisions of IC 27-1-20-12 against such insurer withrespect to its application if he determines that such company wouldotherwise comply with the requirements for such certificate ofauthority.
    (b) The commissioner of insurance, in any administrative

proceeding in which service is made as provided in section 4 of thischapter, may in his discretion order such postponement as may benecessary to afford the defendant reasonable opportunity to complywith the provisions of subsection (a) and to defend such action.
    (c) Nothing in subsection (a) shall be construed to prevent anunauthorized insurer from filing a motion to quash a writ or to setaside service thereof made in the manner provided in section 4 of thischapter on the ground that such unauthorized insurer has not doneany of the acts enumerated in section 2 of this chapter.
(Formerly: Acts 1969, c.194, s.5.) As amended by P.L.252-1985,SEC.168.

IC 27-4-5-6
Enforcement of orders in domestic or foreign courts; definitions;list of reciprocal states; enforcement of foreign decrees; stay; fees
    Sec. 6. (a) The attorney general upon request of the commissionermay proceed in the courts of this state or any reciprocal state toenforce an order or decision in any court proceeding or in anyadministrative proceeding before the commissioner of insurance.
    (b) The following definitions apply throughout this section:
        (1) "Reciprocal state" means any state or territory of the UnitedStates the laws of which contain procedures substantiallysimilar to those specified in this section for the enforcement ofdecrees or orders in equity issued by courts located in otherstates or territories of the United States, against any insurerincorporated or authorized to do business in said state orterritory.
        (2) "Foreign decree" means any decree or order in equity of acourt located in a "reciprocal state," including a court of theUnited States located therein, against any insurer incorporatedor authorized to do business in this state.
        (3) "Qualified party" means a state regulatory agency acting inits capacity to enforce the insurance laws of its state.
    (c) The insurance commissioner of this state shall determinewhich states and territories qualify as reciprocal states and shallmaintain at all times an up-to-date list of such states.
    (d) A copy of any foreign decree authenticated in accordance withthe statutes of this state may be filed in the office of the clerk of anycircuit or superior court of this state. The clerk, upon verifying withthe insurance commissioner that the decree or order qualifies as a"foreign decree" shall treat the foreign decree in the same manner asa decree of a circuit or superior court of this state. A foreign decreeso filed has the same effect and shall be deemed as a decree of acircuit or superior court of this state, and is subject to the sameprocedures, defenses and proceedings for reopening, vacating, orstaying as a decree of a circuit or superior court of this state and maybe enforced or satisfied in like manner.
    (e) At the time of the filing of the foreign decree, the attorneygeneral shall make and file with the clerk of the court an affidavitsetting forth the name and last known post office address of the

defendant.
    (f) Promptly upon the filing of the foreign decree and theaffidavit, the clerk shall mail notice of the filing of the foreign decreeto the defendant at the address given and to the insurancecommissioner of this state and shall make a note of the mailing in thedocket. In addition, the attorney general may mail a notice of thefiling of the foreign decree to the defendant and to the insurancecommissioner of this state and may file proof of mailing with theclerk. Lack of mailing notice of filing by the clerk shall not affect theenforcement proceedings if proof of mailing by the attorney generalhas been filed.
    (g) No execution or other process for enforcement of a foreigndecree filed under this section shall issue until 30 days after the datethe decree is filed.
    (h) If the defendant shows the circuit or superior court that anappeal from the foreign decree is pending or will be taken, or that astay of execution has been granted, the court shall stay enforcementof the foreign decree until the appeal is concluded, the time forappeal expires, or the stay of execution expires or is vacated, uponproof that the defendant has furnished the security for the satisfactionof the decree required by the state in which it was rendered.
    (i) If the defendant shows the circuit or superior court any groundupon which enforcement of a decree of any circuit or superior courtof this state would be stayed, the court shall stay enforcement of theforeign decree for an appropriate period, upon requiring the samesecurity for satisfaction of the decree which is required in this state.
    (j) Any person filing a foreign decree shall pay to the clerk ofcourt six dollars ($6). Fees for docketing, transcription, or otherenforcement proceedings shall be as provided for decrees of thecircuit or superior court.
(Formerly: Acts 1969, c.194, s.6.) As amended by P.L.1-1993,SEC.201.

IC 27-4-5-7
Repealed
    (Repealed by Acts 1978, P.L.2, SEC.2728.)

IC 27-4-5-8
Short title
    Sec. 8. This chapter may be cited as the Uniform UnauthorizedInsurers Act.
(Formerly: Acts 1969, c.194, s.8.) As amended by P.L.252-1985,SEC.169.